2005 (7) TMI 12 - AT - Central Excise

Refund / Unjust enrichment - Credit notes raised in favour of buyers not a proof that duty incidence not passed on assessee who passed on incidence of duty becomes functus officio

Summary

Issues:
1. Classification of goods under Chapter Heading 8543.00 and claim of concessional rate of duty.
2. Refund claim for excess duty paid under provisional assessment.
3. Application of Section 11B and Rule 9B of Central Excise Rules.
4. Doctrine of unjust enrichment and applicability in the case.

Classification of Goods and Concessional Rate of Duty:
The appellant, a manufacturer of "Electroplating Plants and Equipments," filed a classification list seeking concessional duty rate under Notification No. 51/93. Despite initially paying duty at full rate under protest, the Assistant Commissioner approved the concessional rate. The appellant later claimed a refund for excess duty paid, arguing that they did not pass on the duty incidence to buyers as credit notes were issued. However, the lower appellate authority rejected the refund claim, stating that passing on duty at clearance time is relevant, not post-clearance credit notes.

Refund Claim under Provisional Assessment:
The appellant paid excess duty under provisional assessment, seeking a refund after final approval of the classification list. The issue arose whether such payments should be considered as deposits and not duty paid, thus exempting them from the application of Section 11B. The appellant relied on various decisions to support this contention, emphasizing that refunds from finalization of provisional assessments are not subject to unjust enrichment provisions.

Application of Section 11B and Rule 9B:
The Tribunal analyzed the applicability of Section 11B and Rule 9B concerning refunds arising from duty payments under protest and provisional assessments. The Supreme Court's rulings in Allied Photographics and subsequent amendments to Section 11B and Rule 9B were considered. The Tribunal observed that the appellant utilized both Rule 233B and Rule 9B, leading to a detailed examination of whether Section 11B applies to the refund claim.

Doctrine of Unjust Enrichment:
The Tribunal delved into the concept of unjust enrichment, citing various Supreme Court decisions. The judgment highlighted the importance of proving that the duty paid was not passed on to customers and emphasizing the need for restitution. The Tribunal referenced the Sahakari Khand Udyog Mandal case, where the Supreme Court emphasized that the doctrine of unjust enrichment can be invoked irrespective of Section 11B. The Tribunal rejected the appellant's arguments based on the doctrine of unjust enrichment and past decisions, ultimately dismissing the appeal.