2001 (9) TMI 130 - AT - Central Excise

Summary

Issues:
The judgment involves the refund claim of Central Excise duty by M/s. Modi Xerox Financial Services Ltd., a 100% EOU, on the grounds of payment of countervailing duty on components of photocopying machines, assembly of machines, and unjust enrichment.

Refund Claim and Assembly of Machines:
M/s. Modi Xerox Financial Services Ltd. filed refund claims for Central Excise duty paid on assembled photocopying machines, contending that no further duty was liable as no manufacturing activity was involved in the assembly process. The claims were initially sanctioned, but a show cause notice was later issued questioning the refund. The Asstt. Collector sanctioned the refund but ordered it to be credited to the Consumer Welfare Fund, leading to appeals and the present case.

Unjust Enrichment and Res Judicata:
The appellants argued against unjust enrichment, stating that the duty paid was not collected from buyers based on the landed cost per machine. They contended that the matter had been concluded in their favor up to the Supreme Court level, and the subsequent show cause notice was barred by res judicata. The Revenue, however, argued that the provisions on unjust enrichment have retrospective effect and are applicable to refund claims, citing relevant case law.

Judicial Interpretation and Precedents:
The Tribunal analyzed the Supreme Court judgments emphasizing that no refund is allowed if the duty amount is realized from buyers. The Commissioner (Appeals) observed that the excise duty was separately charged to customers and paid, indicating that the duty incidence was passed on to buyers. The Tribunal referred to specific cases where the duty element was realized from buyers, leading to the rejection of the appeal on the grounds of unjust enrichment and passing of the duty burden.

Conclusion:
Considering the retrospective application of provisions on unjust enrichment and the evidence of excise duty realization from buyers, the Tribunal rejected the appeal, affirming that the refund claim cannot be granted as the duty amount was passed on to customers. The judgment aligns with established legal principles and precedents regarding the passing of duty burden and unjust enrichment in Central Excise matters.