2006 (3) TMI 627 - AT - Central Excise

Summary

Issues:
- Appeal against refund order
- Eligibility for small scale benefit
- Unjust enrichment in refund claim
- Interpretation of Supreme Court decision on unjust enrichment

Analysis:
1. The appeal was filed by the Revenue against the order granting a refund of duty to the respondent. The respondents were engaged in manufacturing garments and furniture and had deposited a significant amount during investigations related to small scale benefit availment. The Commissioner of Central Excise had passed an order classifying the goods and imposing penalties and interest.

2. The respondent filed a refund claim which was rejected initially on the grounds of unjust enrichment. However, the Commissioner (A) allowed the appeal stating that the goods were cleared at a uniform MRP, indicating no unjust enrichment based on earlier Tribunal decisions.

3. The Revenue contended that the uniformity in price does not negate unjust enrichment, citing a Supreme Court decision. They argued that duty had been passed on to customers as the assessee had paid duty on the entire contract price. The Revenue challenged the reliance on previous Tribunal decisions.

4. The Tribunal found merit in the Revenue's contention, noting that uniform pricing does not automatically imply no unjust enrichment. The Tribunal referred to the Supreme Court decision clarifying that various factors could influence pricing. The matter was remanded to the original adjudicating authority for further consideration, allowing the assessee to present evidence to show no duty recovery from customers.

5. The Tribunal clarified that if the refund claimed was from the amount deposited during investigations and related to prior proceedings, unjust enrichment provisions would not apply. The original adjudicating authority was directed to examine this aspect in the de novo proceedings. The appeal was allowed by way of remand, and the cross-objection was disposed of accordingly.