2004 (11) TMI 458 - AT - Central Excise

Summary

Issues:
Refund claim rejection based on unjust enrichment principle in relation to provisional assessment finalization.

Analysis:
In this appeal, the main issue revolves around the refund claim of Rs. 13,321/- filed by the appellants, which was rejected due to the application of the principle of unjust enrichment. The appellants failed to demonstrate that they did not pass on the duty incidence to the end customers. The learned counsel argued that the unjust enrichment principle should not apply as the refund claim stemmed from the finalization of provisional assessment. However, the proviso to sub-rule (5) of Rule 9-B, effective from 25-6-1999, extends the application of unjust enrichment even to refund claims arising from finalization of provisional assessment, as in the appellants' case for the period of April 2000 to June 2000. Despite the claim arising from provisional assessment finalization, the appellants were still obligated to prove non-passing of duty incidence to customers.

Furthermore, the counsel contended that the appellants were not given an opportunity to prove non-passing of duty incidence to customers, which is crucial for justice. The authorities below rejected the refund claim solely based on unjust enrichment. Therefore, in the interest of justice, the plea for an opportunity to present evidence regarding non-passing of duty incidence to buyers was deemed valid. Consequently, the impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh decision after hearing the appellants. This decision ensures fairness and upholds the appellants' right to prove the non-passing of duty incidence, leading to the disposal of the appeal in favor of the appellants.