2004 (3) TMI 611 - AT - Central Excise

Summary

Issues Involved:
1. Unjust enrichment applicability under Rule 173L and Section 11B.
2. Res judicata in the context of refund claims.
3. Limitation period for recovery of erroneous refunds.
4. Burden of proof regarding the incidence of duty passed on to the consumer.

Issue-wise Detailed Analysis:

1. Unjust Enrichment Applicability under Rule 173L and Section 11B:
The Revenue contended that Rule 173L and Section 11B are independent and that Rule 173L does not apply to unjust enrichment. The Commissioner (Appeals) held that Rule 173L is a complete code regarding the refund of duty on goods returned to the factory, and only the aspect of the time bar can be deduced from Section 11B. The Tribunal in CCE v. Fort William Company Ltd. supported this by stating that Rule 173L provides the conditions required to claim a refund, and the time limit under Section 11B applies to refund applications filed with reference to Rule 173L. The Commissioner (Appeals) concluded that since there was no sale, and the goods were returned, the duty was not passed on, thus unjust enrichment was not applicable. The Tribunal upheld this view, agreeing that the burden of proving unjust enrichment was not discharged by the Revenue.

2. Res Judicata in the Context of Refund Claims:
The Assistant Commissioner had previously adjudicated on the refund claims, and the Department could not re-adjudicate the same facts under different provisions. The Tribunal referenced MP Tobacco Ltd. v. CCE and other cases, asserting that once a demand has been dropped, the Department cannot initiate proceedings again for the same period on the same set of facts. The Tribunal concluded that the subsequent show cause notice issued by the Department was a multiplicity of proceedings and therefore illegal and void.

3. Limitation Period for Recovery of Erroneous Refunds:
The Tribunal in Re-rolling Mills v. CCE ruled that a demand for an erroneous refund must be made within six months from the date of the refund. The Supreme Court in National Plywood Industries confirmed that the limitation period begins from the date of the refund. The Tribunal found that the show cause notice issued by the Assistant Commissioner in 1997 for a refund made in 1993 was barred by limitation and thus incorrect and illegal.

4. Burden of Proof Regarding the Incidence of Duty Passed on to the Consumer:
The Tribunal held that the burden of proving that the incidence of duty had not been passed on to the consumer lies with the assessee. In the present case, the appellants demonstrated that the goods were returned, and credit notes were issued, indicating no sale occurred and the duty was not passed on. The Tribunal referenced several cases, including Industrial Cables (I) Ltd. v. CCE, Chandigarh, which held that the presumption of incidence of duty under Section 12B is not available where duty is paid subsequently and not at the time of clearance. The Tribunal concluded that the appellants had discharged their burden of proof, and the Revenue failed to provide rebuttal evidence.

Conclusion:
The Tribunal upheld the Commissioner (Appeals) order, finding it just, legal, and proper. The appeal by the Revenue was rejected, affirming that the appellants were entitled to the refund, and the principles of unjust enrichment were not applicable in this case. The Tribunal emphasized that the burden of proof regarding the incidence of duty lies with the party claiming the refund, and in this case, the appellants successfully demonstrated that the duty was not passed on to the consumers.