2007 (3) TMI 602 - AT - Central Excise

Summary

Issues:
Refund claim on excess duty paid, unjust enrichment, burden of proof on passing excess duty incidence to others.

Analysis:
The case involved a refund claim of Rs. 8,11,056/- by the appellant, who processed goods on a job work basis and paid duty on the assessable value. Initially, duty was paid at 115% of the cost of production, but later, duty was paid based on the landed cost of raw material and job charges as per a Board Circular. The appellant claimed a refund of excess duty paid, which was credited to the consumer welfare fund. Both the adjudicating authority and the Commissioner (Appeals) held that the appellant failed to prove that the excess duty incidence was not passed on to others.

The appellant argued that they issued credit notes to customers for the excess duty paid during a specific period and referred to a customer's letter declining to pay the excess duty. They contended that this action proved they did not pass on the excess duty incidence. The appellant relied on a Tribunal decision in a similar case. However, the Revenue representative reiterated the lower authorities' findings that the appellant did not provide evidence that the excess duty was not collected by them.

Upon review, it was found that the appellant informed the customer about charging excess duty, but the customer declined to pay it. Despite this, the appellant cleared goods by paying excise duty during a specific period and produced credit notes issued to customers. However, no further evidence was presented to support the claim that the excess duty incidence was not passed on. A comparison was made to a previous case where evidence was produced to show that the duty incidence was not passed on to the buyer. In this case, the lack of evidence led to the rejection of the appeal, as the customer's letter was deemed irrelevant since it was issued before the goods were cleared.

In conclusion, the appeal was rejected as the appellant failed to provide sufficient evidence to demonstrate that the excess duty incidence was not passed on to others, leading to a denial of the refund claim.