2007 (3) TMI 487 - AT - Central Excise

Summary

Issues:
Unjust enrichment angle in refund to respondents regarding excise duty paid on PSC Poles.

Analysis:
The issue in this appeal pertains to the unjust enrichment angle concerning the refund of excise duty to the respondents. The respondents, who are part of the Government of Maharashtra and work in public utility services, had a dispute regarding the violation of PSC Poles they manufactured. Initially, the assessments were provisional, but later settled in favor of the assessee, resulting in a refund of the excise duty paid by them. The refund was initially sanctioned to the Consumer Welfare Fund by the Assistant Commissioner. However, on appeal, the Commissioner (Appeals) directed the refund to be paid to the assessee. The Revenue challenged this decision. The key contention revolved around whether the burden of duty had been passed on to others, thus invoking the principle of unjust enrichment.

The order highlighted that the appellant manufactured Electric Poles for captive consumption, specifically for drawing Electric Transmission Lines for electricity distribution. The Asstt. Commissioner's observation suggested that the burden of duty paid on poles might have been passed on to consumers, but the Commissioner (Appeals) found this reasoning flawed. The judgment emphasized that in cases of captive consumption like this, there is no occasion to shift the duty burden to others. The decision underscored that the burden of duty paid on poles had not been passed on to others directly or indirectly, making the refund claim valid. The judgment rejected the Revenue's argument citing the Hon'ble Supreme Court decision in Union of India v. Solar Pesticides Pvt. Ltd., emphasizing that the principles of unjust enrichment did not apply due to the specific nature of the electric poles not being further used in the manufacture of other items for sale.

In conclusion, the judgment found that the electric poles were not utilized by the assessee in manufacturing other items for sale, as they were primarily for electricity distribution. Therefore, the order of the Commissioner directing the refund to the assessee was deemed just and proper, warranting no interference. Consequently, the appeal filed by the Revenue was rejected, upholding the decision in favor of the respondents.