2004 (12) TMI 249 - AT - Central Excise

Summary

Issues:
Challenge to refund of excise duty on concrete poles captively consumed by KSEB. Interpretation of unjust enrichment in captive consumption cases.

Analysis:
The Revenue challenged the order granting refund of excise duty on concrete poles captively consumed by KSEB. The Commissioner (Appeals) held that the refund was not hit by unjust enrichment as KSEB had consumed the poles on which duty was paid. The Revenue contested this based on the Supreme Court decision in the Solar Pesticides case. The Tribunal examined the case records and noted similarities with a previous CEGAT decision. The Tribunal highlighted Section 12B of the Central Excise Act, which creates a presumption favoring the Revenue that duty incidence is passed on to the buyer. However, in this case, no sale of the poles had occurred, and the goods were consumed by MPEB for its own projects, not sold to any other person. Therefore, the presumption under Section 12B did not apply, and the refund claim was not hit by unjust enrichment under Section 11B. The Commissioner's order was upheld, and the Revenue's appeal was rejected.

The respondents relied on a Tribunal decision, but the Tribunal did not consider the Supreme Court's interpretation in the Solar Pesticides case. The Supreme Court held that unjust enrichment applies even in cases of captive consumption. The CEGAT in another case emphasized that duty paid on capital goods falls under unjust enrichment. The Tribunal concluded that the duty paid on concrete poles might have been factored into electricity tariffs, indicating the duty burden was passed on to consumers. Therefore, the Commissioner's orders were set aside, and the matter was remanded to the Original Authority for the respondents to provide evidence that duty incidence was not passed on to consumers for refund entitlement. The Tribunal emphasized the need to examine unjust enrichment in captive consumption cases in line with the Supreme Court's interpretation.

In conclusion, the judgment addressed the challenge to refund excise duty on captively consumed concrete poles, emphasizing the interpretation of unjust enrichment in captive consumption scenarios. The Tribunal highlighted the importance of proving no passing on of duty burden to consumers for refund entitlement, considering the Supreme Court's stance on unjust enrichment in captive consumption cases. The case was remanded for further evidence to determine the duty incidence passing on to consumers.