2012 (7) TMI 783 - AT - Central Excise

Refund claim - bar of unjust enrichment assessee submitted that if the increase amount of excise duty is not charged as increased sale price, this itself proved that the incidence of excise duty has been borne by the seller Held that - Their claim is hit by the bar of unjust enrichment under Section 11B of the Act as the uniformity of the price before and after assessment does not lead to the conclusion that incidence of duty has not been passed on to the buyers Against assessee

Summary

Issues:
Refund claim under Section 11B of the Central Excise Act - Bar of unjust enrichment.

Analysis:
The appeal involved a refund claim filed by M/s. CEAT Ltd. against a demand of differential duty confirmed by the department. The dispute arose from provisional assessments made under Rule 9B of Central Excise Rules for goods manufactured and cleared by M/s. South Asia Tyres Pvt. Ltd. (M/s. SATPL) to the appellants. The Commissioner of Central Excise (Appeals) initially decided in favor of M/s. SATPL, leading to the refund claim by the appellants. The issue centered around unjust enrichment, with the appellants arguing that they had not passed on the increased excise duty to their customers. They provided sales and purchase invoices to support their claim, emphasizing that the duty incidence had not been recovered from buyers. The appellants also presented a Chartered Accountant certificate asserting that the duty had not been passed on. They relied on various tribunal decisions and the Supreme Court case of Commissioner of Central Excise, Calcutta Vs. Panihati Rubber Ltd. to support their contention.

On the contrary, the Revenue contended that the refund claim was rightly rejected due to unjust enrichment. The Additional Commissioner argued that the entire duty element, including excise duty, had been treated as an expenditure in the appellant's books, indicating that the duty had been passed on to customers. Citing tribunal decisions and the Supreme Court case of Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd., the Revenue maintained that the uniformity in pricing before and after assessment did not negate the passing on of duty to buyers.

After considering both arguments, the Tribunal found that the issue revolved around whether the refund claim attracted the bar of unjust enrichment under Section 11B of the Central Excise Act. While the appellants relied on the Panihati Rubber Ltd. case, the Tribunal distinguished it from the present situation. Following the decision in Allied Photographics India Ltd., the Tribunal concluded that the appellants' claim was hit by the bar of unjust enrichment. The Tribunal upheld the impugned order rejecting the appeal, stating that the uniformity in pricing before and after assessment did not disprove the passing on of duty to buyers. Consequently, the appeal was dismissed.