2007 (1) TMI 571 - AT - Central Excise

Summary

Issues involved: Refund claim on duty paid waste and scrap generated out of machining process, application of unjust enrichment principle in case of captive consumption.

Refund Claim on Duty Paid Waste and Scrap:
The lower Appellate Authority allowed the refund claim of &8377; 85,895/- on duty paid waste and scrap from machining process. The Commissioner (Appeals) relied on a Tribunal's order in a similar case, stating that demand cannot be sustained on principal manufacturer for scrap generated at job workers premises. The Revenue did not dispute this decision, and a High Court order also supported the Tribunal's decision. The refund claim was rightly sanctioned by the lower appellate authority based on these precedents.

Application of Unjust Enrichment Principle in Captive Consumption:
The plea by the ld.SDR that the refund claim should be tested for unjust enrichment even in case of captive consumption was raised. However, it was found that the respondents did not captively consume the waste and scrap as they never received it back from the job workers. Therefore, the argument for remanding the case to verify if the duty incidence was passed on to customers was rejected. The impugned order was upheld, and the appeal was rejected.