2003 (11) TMI 145 - AT - Central Excise

Refund - Unjust enrichment - Payment of excess excise duty - burden of duty - HELD THAT - It is well settled that it has to be specifically alleged and established by the assessee that he has not passed on the burden of duty to others. Otherwise, his claim for refund would not be maintainable where he himself has not suffered any loss or prejudice, (having passed on, the burden of duty to others), there is no justice or equity in refunding the tax to him merely because he has paid to the Government. It would be a windfall to him. The doctrine of unjust enrichment is a just and salutary doctrine. No one can be allowed to collect the duty from both ends. In other words, he cannot collect duty from purchaser at one end and also claim refund of the same from the Government on the ground that it had been earlier wrongly collected from him contrary to law, by the Government. The power by the Court cannot be exercised in his favour for unjustly enriching him. The certificate, in our view, appears to have been procured from the Chartered Accountant by the appellants to create evidence. Learned Counsel has not doubt, referred to two charts - one captioned as Table No. 1 - the effective rate of excise duty on man-made staple fibre and other as Table No. 6, average price quotation of the price list on the staple fibre, to contend that there was decrease in the market price of the goods manufactured by the appellants, but these tables have not been certified to be correct by any authorised representative of the appellants. These are photocopies on plain prices of papers and from where these photocopies have taken, has not been disclosed and as such, cannot be attached any evidential value. Even otherwise as observed above, mere decrease in the price which may be on account of commercial reasons or many other reasons, discussed above cannot be made basis for holding that statutory presumption prescribed by Section 12B of the Act, stands rebutted. We find from the record that in the earlier round of the proceedings, the matter came up before the Tribunal in appeal filed by the appellant when at that time their refund claim was rejected on the ground of unjust enrichment by the authorities gave specific direction to the appellants to furnish evidence such as invoices, copies of books of accounts, and other data to show that they had not passed on the incidence of duty to the buyers even after imposition of duty on their product. But no such evidence has been furnished by them, as we find from the perusal of the Order-in-Original as well as Order-in-Appeal. Learned Counsel except for the Chartered Accountant report and the Tables referred above had not been able to refer any other document to establish that the statutory presumption to be raised under Section 12B of having passed on incidence of duty to the buyers by the appellants, stand rebutted. Therefore, in our view, the refund claim of the appellants has been rightly rejected by the Commissioner (Appeals) through impugned orders by confirming the Order-in-Original being hit by doctrine of unjust enrichment. Thus, the impugned order passed by the Commissioner (Appeals) is perfectly valid and the same is upheld. The appeal of the appellants is dismissed.

Summary

Issues involved: Appeal against rejection of refund claim on the ground of unjust enrichment.

Summary:
The appeal was filed against the Order-in-Appeal which affirmed the Order-in-Original rejecting the refund claim of the appellant due to unjust enrichment. The appellant had paid excess excise duty and sought a refund, but the authorities rejected the claim stating that the burden of duty had been passed on to customers.

The appellant argued that the doctrine of unjust enrichment should not apply as their invoices did not separately indicate the duty elements and there was no increase in sale price post-duty payment. However, the authorities maintained that the burden of proof lay with the appellant to show that duty burden was not passed on to customers.

The Tribunal emphasized that the burden of proof lies with the assessee to demonstrate that duty burden was not passed on. The statutory presumption under Section 12B of the Act assumes duty incidence is passed on unless proven otherwise. The appellant failed to provide convincing evidence to rebut this presumption, such as invoices, books of accounts, or data.

The Tribunal noted that the decrease in price or showing composite prices in invoices does not automatically prove that duty burden was not passed on. The appellant's arguments based on price stability and Chartered Accountant's certificate were deemed insufficient to rebut the statutory presumption.

Referring to legal precedents, the Tribunal highlighted that mere decrease in price or showing composite prices in invoices is not conclusive evidence of non-passing of duty burden. The Tribunal dismissed the appeal, upholding the Commissioner's decision based on the doctrine of unjust enrichment.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) to reject the refund claim, stating that the appellant failed to provide substantial evidence to rebut the presumption of passing on duty burden, as required by law.