2001 (12) TMI 104 - AT - Central Excise

Summary

Issues Involved:
The issues involved in this case include the clearance of threaded tie rods for captive consumption without payment of duty, claiming exemption under Notification No. 217/86-C.E, rejection of refund claim invoking Section 12B of the Central Excise Act, burden of proof on claimant for refund of duty, and the grounds of time-bar and unjust enrichment for rejecting the refund claim.

Clearance of Threaded Tie Rods for Captive Consumption:
The appellants, manufacturers of Wires and Cables, cleared threaded tie rods for captive consumption without payment of duty, claiming exemption under Notification No. 217/86-C.E. The Department proposed to recover duty on the threaded tie rods, alleging they were used for the manufacture of non-excisable wooden spools. The claim was not time-barred, leading to the present appeals.

Rejection of Refund Claim under Section 12B:
The lower appellate authority rejected the refund claim by invoking Section 12B of the Central Excise Act, which places the burden on the claimant to prove that the duty incidence was not passed on to the buyer. The appellants argued that this provision does not apply when duty was paid at a later stage, citing relevant Tribunal decisions to support their case.

Burden of Proof and Unjust Enrichment:
The Tribunal found that the goods in question were not chargeable to duty as they were not used in the manufacture of any excisable final product. The department failed to establish that the duty incidence had been passed on to the buyer, as there was no specific allegation or evidence to support unjust enrichment. The burden under Section 11B of the Central Excise Act was not discharged by the department, leading to the conclusion that the refund claim was not affected by unjust enrichment. The impugned order was deemed unsustainable in law, and the Assistant Commissioner was directed to effect the refund of the duty amounts within three months from the date of the order.