2007 (6) TMI 420 - AT - Central Excise

Summary

Issues involved: Classification of goods under different headings for excise duty, refund claim based on unjust enrichment principle.

Classification Issue:
The appellants paid Additional Excise Duty on Tyre Cord Fabrics under Heading 59.02 for a specific period as Basic Excise Duty and Special Excise Duty were nil under the said heading. A show cause notice was issued proposing classification under Heading 59.09, but the Supreme Court settled the issue by holding the goods classifiable under Heading 59.02 and not under 59.09.

Refund Claim based on Unjust Enrichment:
The appellants had made significant deposits during the legal proceedings, which they sought as a refund. The Department rejected the refund claim citing the principle of unjust enrichment, stating that the extra duty burden was not borne by the appellants themselves. However, the appellants argued that they had not passed on the extra duty burden to customers and provided evidence to support this claim, including a Chartered Accountant's Certificate and Balance Sheet showing the amount as advances recoverable. They relied on a Tribunal decision in a similar case to support their position.

Decision:
After considering the arguments and evidence presented, the Tribunal found in favor of the appellants. They set aside the impugned order and held that the appellants were entitled to the refund of the deposited amount, as they had not passed on the extra duty burden and had borne it themselves. The Tribunal did not address the question of interest, as the refund itself was being allowed in the present order.