2012 (12) TMI 945 - AT - Central Excise

Refund - unjust enrichment - price variation clause - The Department s stand that in the scheme of things when the goods are sold or cleared for sale on provisional basis at a higher price it has to be assumed that the burden has been passed on to the customer cannot be accepted. - first appellate authority has allowed the refund - Held that - Ld. Appellate authority crystally found no evidence of unjust enrichment. - there is nothing further to dilate the matter for which Revenue s appeal is dismissed. - decided in favor of assessee and against the revenue.

Summary

Issues:
1. Allegation of unjust enrichment due to duty passed on to the customer.
2. Evidence of unjust enrichment in the case.
3. Interpretation of duty passed on in relation to final bills and invoices.
4. Decision on Revenue's appeal and cross-objection.

Analysis:

1. The primary issue in this case revolved around the allegation of unjust enrichment by the Department, claiming that the duty had been passed on to the customer. The Department's show cause notice implied that the burden of duty had been transferred to the buyer, leading to unjust enrichment. However, the appellate authority noted the absence of specific evidence indicating that the duty had indeed been passed on to the customer. The authority rejected the presumption that duty is automatically passed on to the customer when goods are sold at a provisional higher price. The appellant successfully demonstrated that the reimbursement of duty from customers was due to price variation clauses or price revisions, indicating no unjust enrichment.

2. The appellate authority thoroughly examined the evidence and concluded that there was no proof of unjust enrichment. The authority specifically highlighted that the duty passed on should be considered only when duty is collected from the buyer against final bills, not based on invoices or duty paid to the exchequer during goods clearance. This distinction was crucial in determining the entitlement of the appellant for the refund of excess duty paid during the clearance of goods.

3. The interpretation of "duty passed on" was crucial in this judgment. The appellate order clarified that the duty passed on should be linked to the duty collected against final bills, rather than the duty indicated in invoices or paid during the clearance of goods. This distinction was pivotal in establishing the appellant's right to claim a refund for excess duty paid during clearance.

4. Ultimately, the Revenue's appeal was dismissed as there was no evidence to support the allegation of unjust enrichment. The cross-objection was also dismissed in line with this decision. The judgment emphasized the importance of concrete evidence in establishing unjust enrichment claims and highlighted the need for a clear understanding of when duty can be considered as passed on to the customer, particularly in the context of final bills and invoices.