2004 (3) TMI 525 - AT - Central Excise

Summary

Issues:
Applicability of doctrine of unjust enrichment to refund claim.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involves the issue of the applicability of the doctrine of unjust enrichment to the refund claim of the appellants against the impugned order-in-appeal. The appellants, engaged in the manufacture of pump sets, disputed the classification of the pump sets under different tariff headings with the Department. They filed necessary documents under protest and paid duty at a higher rate until the matter was resolved in their favor by the Commissioner (Appeals), leading to a refund claim of excess duty paid during the disputed period.

The learned Counsel for the appellants argued that the doctrine of unjust enrichment should not apply as the duty was paid under protest and there was sufficient evidence to show that the duty incidence was not passed on to buyers. On the contrary, the learned SDR relied on legal precedents to support the applicability of unjust enrichment even in cases of provisional assessment. The Tribunal considered the arguments from both sides and examined the record, noting the facts presented without dispute regarding the classification dispute and the subsequent refund claim by the appellants.

Referring to legal judgments, including one by the Apex Court, the Tribunal held that since duty was paid under protest, the doctrine of unjust enrichment does not apply to the appellants' case. The Tribunal highlighted previous cases where it was established that when duty is paid under protest, unjust enrichment does not come into play. Additionally, the appellants provided affidavits from buyers stating they did not pay extra duty despite the appellants bearing the burden. These affidavits remained unchallenged by the Department, and the invoices did not reflect any change in prices, supporting the claim that duty incidence was not passed on to buyers.

Based on the evidence presented and the legal principles discussed, the Tribunal concluded that the refund claim of the appellants was not affected by the doctrine of unjust enrichment. Consequently, the impugned order of the Commissioner (Appeals) was set aside, and the appeal of the appellants was accepted with any consequential relief permissible under the law.