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2011 (11) TMI 420 - HC - Central ExciseApplication for refund - Notification No.9/2001 CE dated 1-3-2001 - SSI Exemption - held that - the application was filed by the assessee under Section 11B of the Act for refund of the excess amount of duty paid in a sum of Rs. 80, 161/- under the mistaken notion that the actual duty to be paid was 12.8% whereas in fact quantum of excess duty liable to be paid by the assessee was only 9.6% from 31-8-2011 to 12-12-2001. Further excess duty paid has been collected and credited to the consignee and the entire burden of duty has been borne by the assessee and has not been passed on to the consignee. Therefore we hold that conditions of Section 11B of the Act have been satisfied. - Refund allowed - Decided in favor of the assessee.
Issues:
Refund of excess duty paid under mistaken impression, unjust enrichment, applicability of Section 11B of the Act, interpretation of relevant case laws. Analysis: 1. Refund of Excess Duty Paid: The appeal involved a dispute regarding the refund of excess duty paid by the assessee under a mistaken impression. The assessee claimed to be an SSI unit availing a specific duty rate but paid duty at a higher rate due to an error. The excess duty paid was refunded after the consignee raised a debit note and the amount was credited back to the consignee's account. The assessing officer initially sanctioned the refund, but the first appellate authority reversed this decision citing unjust enrichment. 2. Unjust Enrichment: The first appellate authority relied on the decision in the case of S. Kumar's Limited, stating that provisions of unjust enrichment apply to post-clearance adjustments, making refunds impermissible. However, the CESTAT, in line with the decision in the case of M/s. Gokak Mills Ltd., set aside the first appellate authority's order and restored the assessing officer's decision to refund the excess duty paid by the assessee. 3. Applicability of Section 11B of the Act: The appeal raised the question of whether the conditions of Section 11B of the Act were satisfied for granting the refund. The High Court analyzed the facts and concluded that the excess duty paid was refunded after it was collected and credited to the consignee, with the entire burden borne by the assessee. The court held that the conditions of Section 11B were indeed satisfied in this case. 4. Interpretation of Relevant Case Laws: The counsels for both parties cited relevant case laws to support their arguments. The revenue relied on the MRF Ltd. case, emphasizing that subsequent variations in price do not entitle the assessee to claim a refund once goods are cleared and duty is paid. However, the respondent's counsel distinguished this case by referring to the CCE v. International Auto Ltd. case, which clarified the applicability of the MRF Ltd. judgment in light of subsequent legislative changes. Additionally, the Division Bench's decision in Sudhir Papers Ltd. v. CCE was cited to support the assessee's entitlement to a refund when the burden of duty is not passed on. In conclusion, the High Court dismissed the appeal, upholding the decision to refund the excess duty paid by the assessee, as the conditions of Section 11B were found to be satisfied, and the burden of duty was not passed on to the consignee, thus ruling in favor of the assessee.
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