2015 (3) TMI 381 - AT - Central Excise

Refund claim - Wrong classification of goods - Demand of differential duty - Unjust enrichment - Payment of duty under protest - Held that - The fact that the respondent has paid the differential duty under protest after clearance of the goods, these are not in dispute. The case law relied by the ld. AR are not relevant to the facts of the case as in Maharashtra Cylinder Ltd. (2003 (8) TMI 96 - CESTAT, MUMBAI) there was a price variation in the agreement. In the case of Gujarat State Fertilizers & Chem. Ltd. (2004 (1) TMI 143 - CESTAT, NEW DELHI), the duty was paid at the time of clearance of the goods. But in this case, the duty in dispute has been paid after the clearance of the goods. Further, facts of the case are very much similar to the case of Easter Industries Ltd (1999 (8) TMI 915 - CEGAT, NEW DELHI), wherein the Tribunal held that the duty has been paid by making debit entry is made subsequent to the clearance of the goods to the effects that the incidence of duty has not been passed on the buyers. Therefore, I do not find any infirmity in the impugned order, same is upheld as revenue has not produced any evidence on record that duty incidence has been passed on to the buyers. - Decided against Revenue.

Summary

Issues:
Appeal against refund claim sanctioning, unjust enrichment, differential duty payment under protest, duty incidence passed on to buyers, relevant case laws, entitlement for refund claim.

Analysis:
The judgment deals with an appeal by the Revenue against an order sanctioning a refund claim to the respondent. The case involved the payment of differential duty by the respondent after a search revealed alleged misclassification of goods. The Adjudicating Authority rejected the refund claim citing unjust enrichment, but the Commissioner (Appeals) ruled in favor of the respondent, stating that the duty was paid under protest and not passed on to buyers. The Revenue argued that the duty was part of the cost of production and passed on to buyers, relying on case laws like Maharashtra Cylinder Ltd. and Gujarat State Fertilizers & Chem. Ltd.

The respondent contended that they paid the duty after clearance of goods, did not recover any extra amount from buyers, and the duty payment under protest did not imply passing on the duty incidence. The Commissioner (Appeals) relied on precedents like Easter Industries Ltd. vs. CCE to support the refund claim. The judge, after hearing both sides, noted that the duty was paid under protest post-clearance, distinguishing it from the cases cited by the Revenue. Drawing parallels to Easter Industries Ltd., the judge found no evidence of duty incidence passing on to buyers, upholding the Commissioner's order and dismissing the Revenue's appeal.

In conclusion, the judgment emphasizes the crucial distinction between duty payment at clearance and post-clearance under protest. It highlights the significance of proving duty incidence passing on to buyers for unjust enrichment claims. The judge's analysis centered on the specific facts of the case and relevant legal precedents, ultimately affirming the decision in favor of the respondent based on lack of evidence of passing on duty incidence to buyers.