2009 (10) TMI 747 - AT - Central Excise

Summary

Issues Involved:
1. Provisional vs. Final Assessment
2. Applicability of Unjust Enrichment
3. Sufficiency of Evidence for Refund Claim
4. Retrospective Application of Section 12B
5. Imposition of Penalty

Issue-wise Detailed Analysis:

1. Provisional vs. Final Assessment:
The appellants argued that the assessment was provisional since the classification list was not approved until September 1991, thus the principles of unjust enrichment under Section 11B of the Central Excise Act were not applicable. They cited cases like Rajeev Mardia v. CCE and Mafatlal Industries Ltd. v. UOI to support their claim. However, the Tribunal found that the appellants had approached the lower authority assuming it was a final assessment and sought a refund under Section 11B. The Tribunal concluded that the proceedings were not provisional and the principles of unjust enrichment were applicable.

2. Applicability of Unjust Enrichment:
The appellants contended that unjust enrichment principles should not apply as the assessment was provisional. The Tribunal, however, referred to the Supreme Court's ruling in Mafatlal Industries Ltd., which clarified that Section 11A and 11B apply unless the refund is a result of an adjustment under Rule 9B(5). The Tribunal ruled that pendency in finalizing the classification list does not automatically make the assessment provisional, thus the unjust enrichment principles were applicable.

3. Sufficiency of Evidence for Refund Claim:
The appellants provided certificates from a Chartered Accountant and a customer to prove that the incidence of duty had not been passed on. The Tribunal noted that the original authority had found these certificates unreliable as they were based on invoices that included the excise duty in the price of goods. The Tribunal emphasized that the burden of proof was on the appellants to demonstrate that the duty was not passed on, which they failed to do. The Tribunal upheld the rejection of the refund claim due to insufficient evidence.

4. Retrospective Application of Section 12B:
The appellants argued that Section 12B should not apply retrospectively to their case, as their refund claim related to a period before the enforcement of Section 12B. The Tribunal referred to the Supreme Court's ruling in Mafatlal Industries Ltd., which held that Section 12B is retrospective and applies to all proceedings decided on or after 20-9-91. Thus, the Tribunal ruled that the provisions of Section 12B were applicable to the appellants' case.

5. Imposition of Penalty:
The Tribunal found no justification for the imposition of a penalty on the appellants. It acknowledged that the authorities could not have levied the penalty and thus, the appeal succeeded partially in this regard.

Conclusion:
The appeal was partly allowed concerning the imposition of the penalty, which was set aside. However, the appeal was dismissed on all other grounds, including the applicability of unjust enrichment, sufficiency of evidence for the refund claim, and the retrospective application of Section 12B. The Tribunal upheld the rejection of the refund claim and the crediting of the amount to the Consumer Welfare Fund.