2016 (9) TMI 1018 - AT - Central Excise

Refund claim - unjust enrichment - whether the refund sanctioned by Assistant Commissioner is wrong, since the appellants have not proved that they have not passed on the duty burden - duty paid under protest - refund pertains to refund of pre-deposit amount - only - Held that - it is found that the respondents have not produced any specific documentary evidence to prove that the duty has not been passed to other person/ buyer to nullify the doctrine of unjust-enrichment. I do not find that they were forced by any authority and that they followed correctly the provisions of law applicable to under protest payments. It is also found that the respondents have submitted that they were forced to debit the duty, that they made the payment under protest at the time of preventive checks of the goods sold during the period 01.04.1997 to 27.09.1997 but I do not find any evidence proving forced recovery debit and also there is no endorsement on the TR-6 challans for payment under protest as prescribed under Rule 233B of the Central Excise Rules, 1944. The Hon ble Supreme Court in the case of Mafatlal Industries Limited vs. UOI 1996 (12) TMI 50 - SUPREME COURT OF INDIA and in the case of Sahkari Khand Udyog Mandal Limited vs. Commissioner 2005 (3) TMI 116 - SUPREME COURT OF INDIA held that no refund can be made unless it is established that burden of duty is not passed on to others. Therefore, in view of the same, we find no infirmity in the impugned order of Commissioner (Appeals) which is upheld. - Decided against the appellant

Summary

Issues involved:
1. Whether the refund sanctioned by the Assistant Commissioner is wrong due to unjust enrichment.

Analysis:
The appeal involved a dispute regarding the refund of a specific amount sanctioned by the Assistant Commissioner, challenged by the Revenue before the Commissioner (Appeals). The key issue was whether the appellants had proven that they did not pass on the duty burden, thus impacting the eligibility for the refund based on the principles of unjust enrichment.

The appellant argued that the duty amount was a pre-deposit and became eligible for a refund after succeeding in subsequent litigation. They contended that the refund pertained to the pre-deposit amount only, and hence, unjust enrichment principles should not apply in their case.

On the contrary, the Revenue's Authorized Representative highlighted the statutory provisions of Section 11B of the Central Excise Act, 1944. They emphasized that the burden of proving non-passing on the duty incidence lay with the appellants, as per Section 11B(2). The Representative argued that the appellants failed to provide sufficient evidence to establish that the duty burden was not transferred, necessitating the refund amount to be credited to the Consumer Welfare Fund.

After considering the arguments from both sides and examining the records, the Tribunal observed that the appellants had collected charges from customers without paying Central Excise duty. The appellants debited the duty amount through specific entries, indicating it was a duty liability payment, not a pre-deposit. The first appellate authority found that the appellants did not provide concrete evidence to prove non-passage of duty burden, as required to nullify unjust enrichment principles. Referring to relevant legal precedents, including the Supreme Court's rulings, the Tribunal upheld the impugned order of the Commissioner (Appeals) based on the doctrine of unjust enrichment.

Consequently, the Tribunal found no flaw in the Commissioner (Appeals)'s decision and dismissed the appeal, affirming the refund amount's credit to the Consumer Welfare Fund as per statutory provisions.