2007 (10) TMI 184 - AT - Central Excise

Payment of duty on being pointed out by dept. that cement had been cleared in excess - clearance of goods by the appellants was during the months of April and May 1986 while the duty was paid in November 1986 - incidence of duty has been passed on to the buyer will not be attracted when the payment of duty is paid subsequent to clearance of goods - Bar of unjust enrichment would not be attracted refund was rightly allowed

Summary

Issues:
Appeal against erroneous refund sanctioning, unjust enrichment, duty paid under protest, legal infirmities in appellate order, recovery of refund, burden of proof on department.

Analysis:

1. The case involved a revenue appeal against the Order-in-Appeal setting aside the Order-in-Original for a refund of duty amounting to Rs. 60,550. The dispute arose when a difference in quantity was found between the weighment register and invoices, resulting in excess cement cleared with duty implications. The appellants paid the duty under protest, which was later refunded. The revenue contended that the refund was erroneous as the burden of proof regarding unjust enrichment lay with the appellants.

2. The Commissioner examined the plea that the duty was paid without any demand, thus no unjust enrichment occurred. Citing legal precedents, the Commissioner found in favor of the appellants, emphasizing that the department must prove unjust enrichment. The Commissioner set aside the Order-in-Original, leading to the refund. The revenue challenged this decision, arguing that the burden of proof was on the appellants to show they did not pass on the duty to customers.

3. The Tribunal considered both sides' arguments, noting a Supreme Court judgment on unjust enrichment in duty paid under protest. However, the Tribunal found that in this case, the duty was paid after a challenge to the appropriation order, and no evidence suggested passing on the duty to consumers. Referring to previous tribunal rulings and legal principles, the Tribunal upheld the Commissioner's decision to set aside the Order-in-Original and allow the refund, dismissing the revenue's appeal.

4. The Tribunal emphasized that the appellants paid the duty pending appeal, and the refund was granted after due process, without passing on the duty burden. Relying on legal precedents and specific case laws, the Tribunal rejected the revenue's arguments on unjust enrichment and confirmed the decision to allow the refund. The Tribunal's detailed analysis and application of legal principles supported the dismissal of the revenue's appeal and the confirmation of the refund order.