2009 (8) TMI 897 - AT - Central Excise

Unjust enrichment - whether unjust enrichment is involved or not in as much as the challenge was restricted to the said issue?

Summary

Issues:
Whether unjust enrichment is involved in the refund claim for duty paid on cold rolled strips.

Analysis:
The appellant, a manufacturer of cold rolled strips, claimed a refund for the duty paid on the strips from 1-4-1992 to 31-3-1998, contending that no duty was payable on them. The Hon'ble Supreme Court directed that the issue of unjust enrichment must be addressed first before considering the merits of the claim. The original authority and the Commissioner (Appeals) found that the duty burden had been passed on to consumers by the appellant.

The appellant's advocate acknowledged that duty amounts were indicated on gate passes and invoices up to 31-3-1994 and later, the invoices showed a composite amount inclusive of duty. The appellant claimed to have operated at a loss, referred to the BIFR, and ceased operations in 1999. They argued that indicating duty amounts was per Section 12A of the Central Excise Act and should not imply passing the duty burden to consumers as duty was paid under protest.

The Joint CDR cited various cases to assert that mentioning duty amounts on statutory documents like gate passes and invoices serves as evidence of passing on the duty burden to consumers. The burden of proving otherwise lies on the appellant, and their failure to do so makes the lower authorities' orders legally sound.

The Tribunal noted that Section 12A mandates duty amount disclosure on documents to inform buyers. Since the appellant complied by indicating duty amounts, it was deemed as evidence of passing on the duty burden. The Tribunal emphasized that burden of proof rests on the appellant, especially when duty amounts are mentioned in documents. As the appellant did not dispute collecting the invoiced amounts, the Tribunal upheld the lower authorities' decisions that the appellant passed on the duty burden and did not overcome the unjust enrichment bar.

In conclusion, the Tribunal found no reason to overturn the lower authorities' decisions as the appellant failed to demonstrate non-passing of the duty burden. Since the appeal solely contested unjust enrichment, no further issues remained, leading to the rejection of the appeal.