2011 (2) TMI 188 - HC - Central Excise

Demand - Refund - unjust enrichment - the price of the articles remained the same even after the period in question pointing out that nothing was added to the price although the assessee was asked to pay duty for the period which they initially paid on demand - Section 12B was substituted by the Amending Act 40 of 1991 with effect from 20th November, 1991 and thus, the said provision has no application to the claim of refund made earlier - Section 12B of the Act on the basis of onus is even not tenable as sufficient materials were placed by the assessee in support of their claim that there was no unjust enrichment and those statements have not been found to be false or unreliable - Appeal is dismissed

Summary

Issues:
Appeal against order dismissing appeal for refund of Central Excise Duty on HDPE Tapes due to unjust enrichment.

Detailed Analysis:
The case involved an appeal by the Commissioner of Central Excise against an order dismissing their appeal for refund of Central Excise Duty on HDPE Tapes. The manufacturer of HDPE Tapes used them captively for the production of HDPE Woven Fabrics, which were then used for HDPE Sacks. The Department requested duty payment on HDPE Tapes as duty was not paid on the immediate product. The assessee claimed a refund based on certain exemptions under Central Excise Rules, which was initially rejected but later allowed by the Commissioner (Appeals) and CEGAT. The Department challenged these decisions, leading to a series of appeals and orders, including a Supreme Court direction to re-examine the claim. The Deputy Commissioner eventually allowed the refund, but the Commissioner (Appeals) set it aside, prompting the present appeal.

The Division Bench framed a question regarding the burden of proof on passing the duty burden to the buyer. The Department argued that the burden was on the assessee to prove no unjust enrichment, citing Section 12B of the Central Excise Act. However, the Court noted that Section 12B was amended after the refund claim was made, making it inapplicable. The Tribunal found that the assessee had shown consistent pricing despite duty payment on tapes, indicating no unjust enrichment. The Court held that the Commissioner (Appeals) did not consider this evidence and rightly set aside their order. The Court dismissed the Department's application as lacking substance and awarded no costs.

In conclusion, the Court upheld the Tribunal's decision, emphasizing the adequacy of evidence provided by the assessee to demonstrate no unjust enrichment. The Court rejected the Department's argument based on Section 12B, as it was not applicable to the refund claim period. The judgment highlighted the importance of considering all evidence and materials presented by the parties in such cases to ensure a fair and just decision.