2006 (11) TMI 50 - AT - Central Excise

Refund Unjust enrichment As a evidence Chartered Accountant certificate indicates that impugned amount not debited to trading and profit and loss account and the same not forming part of cost of finished goods Refund admissible to appellant

Summary

Issues involved:
Refund claim credited to Consumer Welfare Fund; Appellant working under compounded levy scheme; Duty demanded on pollution control equipment; Refund claims rejected by department; Doctrine of unjust enrichment applied; Appeal against refund claim rejection; Appellant's submission regarding differential duty payment; CA's certificate not considered properly; Incidence of duty passed on to customers; Invoices indicating inclusive excise duty; Issue of unjust enrichment; Findings of lower authorities based on accounting system misconception; Chartered Accountant's certificate; Division bench judgments on similar issues; Appellant's eligibility for refund.

Detailed Analysis:

1. Refund claim credited to Consumer Welfare Fund: The appeals were filed against the order-in-appeal upholding the order-in-original that credited the refund claim amount to the Consumer Welfare Fund.

2. Appellant working under compounded levy scheme: The appellant was working under the compounded levy scheme during a specific period, paying duty based on the annual capacity determined by the Central Excise Commissioner.

3. Duty demanded on pollution control equipment: A doubt arose regarding the duty demanded on galleries, considered pollution control equipment, leading to duty payment by the appellant for three months.

4. Refund claims rejection and unjust enrichment: The department rejected the refund claims citing pending appeal and the doctrine of unjust enrichment due to the incidence of duty being passed on to customers.

5. Appellant's submission and CA's certificate: The appellant argued that the differential duty was paid, CA's certificate not considered properly, and the cost of fabrics not including the refund claimed amount.

6. Incidence of duty passed on to customers: The issue revolved around whether the appellant proved that the duty incidence was not passed on to customers to claim a refund, with the lower authorities applying the doctrine of unjust enrichment.

7. Misconception in accounting system: Findings of lower authorities based on a misconception of the accounting system, not giving weight to the CA's certificate indicating the duty amount was not passed on to customers.

8. Division bench judgments: Reference to division bench judgments supporting the appellant's claim that the duty burden was not passed on to customers, making them eligible for a refund.

9. Conclusion and eligibility for refund: The judge found that the appellant demonstrated the duty incidence was not passed on to customers, thus ruling in favor of the appellant, allowing the appeals with consequential relief.

This detailed analysis covers the issues involved in the legal judgment, highlighting the key arguments, submissions, and findings related to the refund claim and the passing on of duty incidence to customers.