2008 (1) TMI 801 - AT - Central Excise

Summary

Issues involved:
Refund of excess duty paid under Section 3A of the Central Excise Act, unjust enrichment, burden of proof on passing on the duty incidence to buyers.

Summary:

Refund of Excess Duty Paid:
M/s. Southern Ferro Ltd. (SFL) appealed against paying an excess amount of duty on MS ingots under Section 3A of the Central Excise Act. The jurisdictional Deputy Commissioner sanctioned the refund claim but credited it to the Consumer Welfare Fund. The Commissioner (Appeals) found that the duty claimed as refund had been recovered from customers, indicating passing on the duty incidence. SFL argued that the refund procedure was inherent in Section 3A and not subject to Section 11B, 12B, and Rule 9B. They sought a refund of the excess amount.

Unjust Enrichment and Burden of Proof:
The Tribunal referred to the Mafatlal Industries case, stating that unjust enrichment does not apply to refunds during provisional assessment. However, in other cases, including finalization under Section 3A(5), unjust enrichment must be considered. The appellants failed to provide evidence to show they had not passed on the excess duty to buyers. Their argument that Section 11B, 12B, and Rule 9B were irrelevant for duty payments under Section 3A was dismissed. Section 12B states that duty payers are deemed to pass on the incidence unless proven otherwise. As SFL did not prove this, the appeal was dismissed.

This judgment highlights the importance of proving non-passing on of duty incidence for refund eligibility under the Central Excise Act, emphasizing the burden of proof on the taxpayer.