2005 (2) TMI 606 - AT - Central Excise

Summary

Issues:
1. Application for stay arising from Commissioner (Appeals) order modifying lower authority's decision on excess duty refund.
2. Unjust enrichment regarding passing on of duty incidence to customers in depot and factory gate sales.

Issue 1: Application for Stay

The case involved an application for stay following the Commissioner (Appeals) order, which modified the decision of the lower authority regarding excess duty refund. The lower authority had determined that excess duty was paid and refundable, but it was credited to the Consumer Welfare Fund as the duty incidence was deemed to have passed on to the buyers. However, the Commissioner in the impugned order directed the refund to be sanctioned and disbursed to the assessee, leading to the Revenue's grievance and subsequent application for stay. The Tribunal noted the disagreement between the parties on the refund issue and decided to stay the operation of the impugned order during the appeal, considering the prima facie case made by the department.

Issue 2: Unjust Enrichment

Regarding the issue of unjust enrichment, the Commissioner (Appeals) observed that in depot sales, the assessee charged composite sales without indicating the Excise duty separately. It was noted that the sales price remained constant regardless of the duty amount paid by the assessee during different periods, leading to the conclusion that duty was not passed on to customers in depot sales. However, the Revenue contended that even in factory gate sales, the assessee issued commercial invoices showing composite prices, which were the same as those charged at the depot. The Revenue argued that the duty incidence was indeed passed on to customers in both scenarios. The Tribunal emphasized that the burden of proof regarding non-passing of duty incidence rested on the party claiming the refund. Mere consistency in prices before and after duty payment was deemed insufficient to discharge this burden. Consequently, the Tribunal found that the Commissioner erred in concluding that the burden was met by the assessee, and hence decided to stay the operation of the order during the appeal process based on the department's strong prima facie case.

In conclusion, the judgment addressed the application for stay arising from a Commissioner (Appeals) order on excess duty refund and examined the issue of unjust enrichment concerning the passing on of duty incidence to customers in depot and factory gate sales. The Tribunal highlighted the importance of proving non-passing of duty incidence for refund claims and decided to stay the operation of the impugned order based on the department's strong prima facie case.