2007 (5) TMI 524 - AT - Central Excise

Summary

Issues:
Refund rejection based on unjust enrichment.

Analysis:
The appeal was against the rejection of a refund claim of Rs. 3,42,872 on the grounds of unjust enrichment. The Commissioner (Appeals) upheld the rejection stating that the duty incidence had been passed on to the buyers. The appellants argued that the duty was paid under protest, and the price remained constant without passing on the duty amount to customers. They provided evidence to support their claim. The Commissioner did not consider this argument adequately.

The learned Counsel cited various rulings to support the appellants' position that when duty is paid under protest and not passed on to buyers, the bar of unjust enrichment does not apply. One such case referred to was Southern Refineries Ltd. v. CCE, Trivandrum. The judgment emphasized that if the price was fixed inclusive of duty and paid under protest, it cannot be presumed that the duty burden was transferred to buyers. Similar views were expressed in other cases like CCE, Mangalore v. Manjunath Food & Packaging P. Ltd. and CCE, Calcutta-III v. Panihati Rubber Ltd.

After reviewing the submissions and citations, the Tribunal found that the appellants had paid duty under protest, and the price remained constant without passing on the duty to customers. The appellants provided an affidavit stating they did not collect the duty from customers and informed them about their eligibility for duty exemption. The Tribunal held that the appellants met the burden of proving no unjust enrichment had occurred. The judgment referred to the case of Himatsingka Seide Ltd. v. CC, Bangalore to support this finding.

The Tribunal also noted the appellants' entitlement to interest based on the Larger Bench judgment in Ram Vision Limited v. CCE, Meerut, which stated that interest should be paid from three months after the refund application until the refund date. Consequently, the appeal was allowed, granting the refund claim and interest as applicable.