2009 (6) TMI 806 - AT - Central Excise

Summary

Issues involved: Stay petition against Order-in-Original and Order-in-Appeal regarding refund of duty amount, applicability of unjust enrichment doctrine, pre-deposit requirement under Section 35F of the Central Excise Act, 1944.

Stay Petition No. E/S/1676/08:
The petition was filed against the Order-in-Original confirming a demand and penalty imposed by the Commissioner of Central Excise. The applicants had availed suo motu credit of the amount in question, which was later sanctioned as a refund but to be credited to the Consumer Welfare Fund after recovery from the applicants. The Tribunal examined the facts of the case and directed the applicants to pre-deposit the demanded amount within a specified period, failing which their appeal would be dismissed without further notice.

Stay Petition No. E/S/323/2009:
This petition was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) regarding the refund of duty amount. The Tribunal found that the amount paid by the applicants was not a pre-deposit under Section 35F of the Central Excise Act, 1944, but a payment of duty as per the High Court's directions. The doctrine of unjust enrichment was held to be applicable, and the applicants were directed to pre-deposit the demanded sum within a specified timeframe, with the penalty pre-deposit being waived upon compliance.

The Tribunal emphasized the importance of complying with the pre-deposit requirement and highlighted the need for applicants to demonstrate that the burden of the duty amount was not passed on to consumers to avoid unjust enrichment. The legal precedent regarding the doctrine of unjust enrichment was cited to support the decision. The Tribunal dismissed the second stay petition as it became infructuous due to the decision on the first petition, and directed the amount to be held by the Department pending appeal disposal.