2009 (12) TMI 830 - AT - Central Excise

Summary

Issues involved: Refund of Education Cess on sugar and molasses, application of Section 11B, Section 12B of Central Excise Act, unjust enrichment, passing on incidence of duty.

Refund of Education Cess on Sugar:
The appellants sought refund of Education Cess on sugar, claiming that the incidence of Education Cess was borne by the sole selling agents and not passed on to customers. The Asst. Commissioner initially ordered to credit the amount to the Consumer Welfare Fund, but on appeal, a partial refund was allowed. The appellants argued that those bearing the duty are eligible for refund. However, it was established that the Education Cess had been collected from customers by the appellants themselves. The Commissioner (Appeals) upheld the decision, stating that the appellants are not eligible for refund as they passed on the incidence of Education Cess.

Refund of Education Cess on Molasses:
Regarding the refund claim on molasses, the appellants contended that since molasses were not sold but cleared for captive consumption in the manufacture of Denatured Spirit, the provisions of Section 12B should not apply. They argued that the Denatured Spirit was sold at a price fixed by the State Government, hence, the bar of unjust enrichment should not apply. However, it was held that the principle of unjust enrichment applies even when goods are used for captive consumption, and the person claiming refund must prove that the duty incidence was not passed on. The appellants' argument that selling at a controlled price negates passing on the duty incidence was rejected based on legal precedents. The Commissioner (Appeals) decision to deny the refund of Education Cess on molasses was upheld.