1991 (8) TMI 109 - HC - Central Excise

Summary

Issues:
Implementation of order passed by Collector (Appeals) for refund claim under Central Excise Act; Application of principle of unjust enrichment; Failure of Department to refund amount; Burden of proof on Department to establish duty passed to customer.

Analysis:
The petitioners, manufacturers of switches and fuse units, filed a refund claim for excess duty paid between June 11, 1987, and November 11, 1987, totaling Rs. 1,51,273.40. The Assistant Collector refunded Rs. 1,22,699.75 but rejected the rest based on unjust enrichment. The Department appealed, citing unjust enrichment and a previous case law. However, the Collector (Appeals) upheld the petitioners' contention, dismissing the appeal on October 4, 1988.

Following the decision, the petitioners demanded refund through letters, receiving no response from the Department. The petition sought implementation of the Collector (Appeals) order. The Department's defense of unjust enrichment was refuted, highlighting that the burden to prove the duty was passed to the customer lies with the Department. The Department failed to provide any evidence supporting this claim.

The Court found no justification for withholding the refund, especially since the duty was paid under protest. It was emphasized that the petitioners were entitled only to the amount approved by the Assistant Collector. Thus, the Court partially allowed the rule, directing the Department to refund Rs. 1,22,699.75 within two weeks. Failure to comply would result in interest at 15% per annum until repayment, with the Department bearing the costs of the petition.