2006 (3) TMI 488 - AT - Central Excise

Summary

Issues:
1. Rejection of refund claim due to lack of exemption notification on the date of duty payment.
2. Argument regarding the nature of the amount paid to the exchequer and applicability of exemption notification.
3. Determination of unjust enrichment and the order to credit the amount to the Consumer Welfare Fund.

Analysis:
1. The original authority rejected the appellant's refund claim as there was no exemption notification on the date of duty payment. The first appellate authority acknowledged the amount as refundable but found it necessary to credit it to the Consumer Welfare Fund due to the failure to prove that the duty burden was not passed on to buyers, resulting in rejection based on unjust enrichment.

2. The appellant argued that the amount paid for goods clearance should not be considered as duty since the goods were initially exempt under a specific notification. However, the department maintained that no exemption was applicable on the clearance date, supported by gate passes and a letter of protest issued by the appellant. The payment was treated as duty of excise, and the refund claim was made under relevant Central Excise provisions, leading to the rejection of the argument to exclude Section 11B applicability.

3. The judgment concluded that the duty paid by the appellant was ultimately borne by their buyers as evidenced by gate passes, leading to the application of the unjust enrichment principle. Therefore, the order to credit the amount to the Consumer Welfare Fund was upheld, and the appeal was dismissed as the refund claim was deemed to be hit by the bar of unjust enrichment.