2011 (11) TMI 163 - AT - Central Excise

Payment of higher duty by an 100% EHTP at the instance of department - claim of refund - unjust enrichment - Department directed vide letter dated 14.12.2007 that concession provided under Notification 6/2006-CE dated 01.03.2006 was not applicable to them assessee paid duty @ 16% under protest - instruction was withdrawn by their subsequent letter dated 14.06.2008 - Held that - Assessee have maintained the same contract price before and after 14.06.2008 and their payment of higher duty was under protest and was at the insistence of the department. Therefore the refund claim be allowed to the party. Decided in favor of assessee.

Summary

Issues:
Appeal against the order crediting refund to Consumer Welfare Fund upheld by Commissioner (Appeals).

Analysis:
The case involved an appeal against the order of the Commissioner (Appeals) upholding the crediting of a refund to the Consumer Welfare Fund. The appellant, a 100% EHTP unit engaged in manufacturing and exporting computers and accessories, faced a dispute regarding the duty rate applicable to their products. Initially directed to pay duty at 16%, they paid under protest while maintaining contract prices with buyers based on a lower duty rate of 12.36%. The appellant claimed a refund, which was accepted on merits but credited to the Consumer Welfare Fund due to unjust enrichment concerns.

The appellant argued that they did not pass on the excess duty burden to customers, citing various legal precedents where refunds were granted in similar circumstances. The Department contended that the appellant had indicated the higher duty rate in their invoices, implying passing on the burden. However, the Tribunal found that the appellant's contractual agreements with buyers were based on a lower duty rate, and the higher duty was paid under protest due to departmental instructions.

In analyzing the case, the Tribunal referenced legal decisions where refunds were allowed when duty burdens were not passed on to customers. The Tribunal noted that the appellant maintained contract prices before and after the duty rate clarification, paid the higher duty under protest, and did not pass on the burden to customers. Consequently, the Tribunal set aside the finding of unjust enrichment and directed the refund claim to be allowed to the appellant.

Ultimately, the appeal was allowed with consequential relief, emphasizing that the refund claim should be granted in accordance with the law.