2010 (9) TMI 1007 - AT - Central Excise

Issues Involved:
1. Rejection of refund claim by the Assistant Commissioner.
2. Applicability of Section 11B of the Central Excise Act, 1944.
3. Principle of unjust enrichment.
4. Difference between provisional assessment and final assessment.
5. Legal precedents and their applicability.

Issue-wise Detailed Analysis:

1. Rejection of Refund Claim by the Assistant Commissioner:
The Assistant Commissioner, Noida, rejected the appellant's refund claim of Rs. 2,51,714/- on 31-3-2005. This decision was upheld by the Commissioner (Appeals), Meerut-II, on 19-1-2006, leading to the present appeal.

2. Applicability of Section 11B of the Central Excise Act, 1944:
The appellants contended that Rule 96ZQ of the Excise Rules is a complete code in itself, and therefore, the provisions of Section 11B, including the principle of unjust enrichment, are not applicable. They cited the Supreme Court decision in Commissioner of C. Ex., Mumbai-II v. Allied Photographics India Ltd. to support their argument. However, the Tribunal found that the provisions of Section 11B are indeed applicable to the refund claim filed by the appellants after the final assessment.

3. Principle of Unjust Enrichment:
The adjudicating authority and the Commissioner (Appeals) both held that the appellants had passed on the incidence of excise duty to their buyers, as the duty element was included in the processing charges. Consequently, the principle of unjust enrichment was applicable, and the refund claim was denied. The Tribunal upheld this view, emphasizing that the appellants had admitted to including the duty in the processing charges, which was passed on to the customers.

4. Difference Between Provisional Assessment and Final Assessment:
The provisional assessment determined the duty liability at Rs. 1,93,500/- per month from April 1999 to February 2000 and Rs. 2,04,000/- for March 2000. The final assessment, however, determined the duty at Rs. 1,50,000/- per month from April 1999 to February 2000 and Rs. 2,00,000/- for March 2000. This difference led to the refund claim. The Tribunal noted that the refund consequent upon finalization of provisional assessment does not attract the bar of unjust enrichment, but in this case, the appellants had already transferred the duty element to the buyers.

5. Legal Precedents and Their Applicability:
The Tribunal referred to the decision of the Supreme Court in Allied Photographics India Ltd., which distinguished between the refund at the time of finalization of assessment and a refund claim filed thereafter. The Tribunal also cited the Supreme Court's ruling in Sahkari Khand Udyog Mandal Ltd., which stated that the principle of unjust enrichment can be invoked irrespective of the statutory provision. The Tribunal found that the orders passed by the Tribunal in Shri Rajendra Rolling Mills and Shree Ram Textile and Processing Mills did not lay down the correct proposition of law and were contrary to the Supreme Court's decisions.

Conclusion:
The Tribunal dismissed the appeal, holding that the appellants had passed on the duty incidence to the buyers, and therefore, the refund claim was rightly rejected by the authorities. The principle of unjust enrichment was applicable, and the appellants failed to establish their entitlement to the refund. The appeal was dismissed in view of the well-settled law by the Supreme Court.

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