2011 (8) TMI 1263 - HC - Central Excise

Summary

Issues involved: Dispute over refund of duty paid for Waste and Scrap of Cables, unjust enrichment, applicability of legal precedents.

Refund of Duty Dispute:
The reference under Section 35H of the Central Excise Act, 1944 was made by the revenue against an order dismissing the appeal by the Commissioner of Central Excise, Kolkata-III. The dispute revolved around the claim of refund by the respondent for Waste and Scrap of Cables. Initially, there was a question of whether such materials were excisable, which was resolved in favor of the respondent by the Assistant Commissioner's order. Subsequently, the respondent applied for a refund of duty paid under protest, which was rejected by the Assistant Commissioner citing unjust enrichment. The Commissioner (Appeals) later allowed the appeal, stating that there was no unjust enrichment as the assessee had paid the duty from their own pocket. The Tribunal upheld this decision, emphasizing that the revenue failed to produce evidence to the contrary.

Unjust Enrichment:
The issue of "unjust enrichment" was a key point of contention. The Tribunal affirmed the findings of the Commissioner (Appeals) that there was no unjust enrichment on the part of the assessee. The purchaser had specifically offered to buy the items at a set price without any obligation to pay excise duty, which the assessee accepted. Despite the revenue demanding excise duty, the assessee bore the cost without passing it on to the customer. Both the Commissioner (Appeals) and the Tribunal relied on evidence provided by the assessee, including original offers, customer affidavits, and letters, to support the claim of no unjust enrichment. The courts found that the revenue did not present any evidence to counter these claims, leading to the affirmation of the decision in favor of the assessee.

Applicability of Legal Precedents:
The appellant argued that a previous Supreme Court decision should not have been relied upon by the Tribunal due to a subsequent conflicting decision. However, the High Court held that until the earlier decision is overruled by a larger Bench, it remains binding. Despite this argument, the Court emphasized that the question of law raised by the appellant was irrelevant in this case, given the factual findings on unjust enrichment. Ultimately, the Tribunal's decision to uphold the refund of excise duty to the assessee was deemed appropriate, and the reference was dismissed with no order as to costs.