2009 (10) TMI 706 - AT - Central Excise

Summary

Issues Involved:
Challenge to order for repayment of amount; Claim of mistaken belief in payment of excise duty; Applicability of exemption notification; Transfer of duty burden to customers; Unjust enrichment; Grant of stay of impugned order; Waiver of deposit pending appeal.

Analysis:
The appellants contested the order directing them to repay an amount stated to have been wrongly refunded, arguing that the initial payment was made under the mistaken belief that their product was subject to excise duty, which was actually exempted under Notification No. 56/2002-CE. Reference was made to a previous Tribunal order related to a similar issue for an earlier period. The Department contended that since the duty burden was passed on to customers, the appellants should not be entitled to a refund to avoid unjust enrichment.

Regarding the unjust enrichment issue, it was determined that a decision on this matter should be made after considering all contentions, including the absence of a specific charge in the show cause notice. The Tribunal found that the appellants had made a prima facie case for granting a stay of the order, as the amount to be recovered was the same amount previously refunded erroneously. Therefore, the impugned order was stayed, and the requirement for deposit was waived until the final disposal of the appeal. The demanded amount, interest, and penalty were all waived during this period. It was clarified that these observations were solely related to the stay application, and the application was disposed of accordingly.