2007 (6) TMI 456 - AT - Central Excise

Summary

Issues:
The issues involved in this case are the applicability of duty on goods captively consumed and exempted by Notifications, burden of proving non-passing of duty incidence to consumers, and the relevance of unjust enrichment in the context of constant prices.

Applicability of Duty on Captively Consumed Goods:
The Commissioner (Appeals) noted that goods captively consumed and exempted by Notifications are not required to pay duty. Referring to a Tribunal judgment and previous court decisions, it was established that the duty burden on inputs used captively is not passed on to purchasers of final goods due to constant prices. Consequently, the Commissioner upheld the assessee's plea regarding the non-applicability of unjust enrichment provisions.

Burden of Proving Non-Passing of Duty Incidence:
The learned SDR argued that the burden of proving that duty incidence was not passed on to consumers lies with the assessee. Citing an Apex Court judgment, it was emphasized that the assessee must demonstrate the absence of unjust enrichment. However, the Consultant contended that they had discharged this burden by maintaining constant prices, supported by various judgments from High Courts and Tribunals.

Relevance of Unjust Enrichment and Constant Prices:
After considering submissions from both sides, it was found that the price of final products remained unaffected by intermediate products, indicating that duty burden was not transferred to consumers. The Commissioner's decision was deemed lawful based on the Consultant's referenced judgments. The Apex Court's ruling in a similar case was distinguished, as the assessee in this instance successfully discharged their burden. Consequently, the appeals were dismissed for lack of merit.