2017 (12) TMI 1600 - HC - Central Excise

Unjust enrichment - refund amount credited to consumer welfare fund instead of refunding the same to the respondent on the ground that it has not passed the test of unjust enrichment as envisaged under Section 12B of the Central Excise Act, 1944 - Held that - The matter is remanded to the Tribunal for considering whether the respondent has passed on the burden of duty to the buyer, which term is not restricted to the first buyer alone but also extends to the ultimate customer - appeal allowed by way of remand.

Summary

Issues:
Refund of Central Excise Duty, unjust enrichment, reversal of judgment by Supreme Court, remanding the case for specific finding on passing the burden of duty.

Refund of Central Excise Duty:
The respondent, an assessee for Central Excise Duty, filed refund claims for a portion of the duty collected by the Revenue. However, the Revenue credited the amounts to the consumer welfare fund instead of refunding them to the respondent, citing non-compliance with the unjust enrichment test under Section 12B of the Central Excise Act, 1944. This led to the respondent filing appeals before the Customs, Excise and Service Tax Appellate Tribunal, South Zone.

Unjust Enrichment and Reversal of Judgment:
The Tribunal allowed the respondent's appeals based on a judgment from the Madras High Court. The Revenue argued that the Madras High Court judgment had been overturned by the Supreme Court in a different case. The respondent, acknowledging the reversal, requested a remand to the Tribunal for a specific determination on whether the burden of duty had been passed on to the buyer, ensuring that the ultimate consumer bore the Excise Duty burden.

Remand for Specific Finding:
Both parties agreed that no specific finding had been made on whether the burden of duty had been transferred to the final buyer. Consequently, the High Court set aside the previous orders and remanded the matter to the Tribunal. The Tribunal was instructed to assess whether the respondent had shifted the duty burden to the buyer, including the final consumer, as clarified by the Supreme Court in a previous ruling. The Tribunal was directed to provide notice to both parties, conduct a hearing, and make a decision on this crucial issue.

Conclusion:
In light of the above, the High Court allowed the appeals and directed the Tribunal to determine whether the burden of duty had been passed on to the buyer. The remand was necessary to establish whether the respondent had ultimately borne the burden of the Excise Duty. As a result, any pending Miscellaneous Petitions were deemed irrelevant and disposed of accordingly.