2011 (11) TMI 184 - AT - Central Excise

Denial of Refund claim unjust enrichment - additional duty of excise leviable under Sugar Export Promotion Act, 1958 was wrongly deposited by the assessee burden of duty passed on to customers Held that - Provisions of Sec.11B of the Central Excise Act, states that onus is on the assessee to show that burden has not been passed on the customers. The only contention is that the amount was paid to the Central Government much before the recovery from their customers. It is found that as the amount in question for which the refund is claimed is already recovered by the assessee from their customers. - Decided against the assessee.

Summary

Issues:
Refund claim under Sugar Export Promotion Act, 1958 - Burden of duty passed on to customers - Interpretation of Sec.11B of Central Excise Act - Doctrine of unjust enrichment - Applicability of Supreme Court decision in Sahakari Khand Udyog Mandal Ltd. case.

Analysis:
The case involved a refund claim of Rs. 21,63,625/- by the appellants under the Sugar Export Promotion Act, 1958, stating that they wrongly deposited additional duty of excise during a specific period. The adjudicating authority rejected the refund claim, but the Commissioner (Appeals) later ruled in favor of the appellants, ordering the refund amount to be credited to the Consumer Welfare fund due to passing the burden of duty to customers. The appellants contended that they paid the amount from their own account and thus were entitled to the refund.

The Revenue argued that the burden of proof lies on the assessee to demonstrate that the duty burden was not transferred to customers, citing the Supreme Court's decision in Sahakari Khand Udyog Mandal Ltd. vs. CCE&C -2005 (181) ELT. 328 (S.C.). The Tribunal referred to Sec.11B of the Central Excise Act, stating that the onus is on the assessee to prove that the burden was not passed on. Quoting the Supreme Court, the Tribunal emphasized the doctrine of unjust enrichment, stating that regardless of statutory provisions, a person must show payment, non-transfer of burden, and potential loss to claim refund.

The Tribunal found that the appellants had indeed recovered the amount from their customers, even though the payment to the Central Government preceded the recovery. As the refund amount was already collected from customers, the Tribunal concluded that the burden of duty had been passed on, leading to the dismissal of the appeal. Additionally, the Cross-objection filed by the Revenue was also dismissed in similar terms.