2005 (1) TMI 208 - AT - Central Excise

Refund claim - Unjust enrichment - duty burden - manufacture of aluminium shapes and sections - HELD THAT - Having failed to prove the non-passing of the incidence of duty to the buyers, the refund claims of the appellants have been rightly held to be hit by the principle of unjust enrichment. The appellants cannot be permitted to enrich themselves by collecting the duty from both ends i.e. Government as well as the consumers/buyers. Thus, it was observed by the Tribunal that the bar of unjust enrichment was not attracted. But such is not the position in the present case. Moreover, the law laid down in both those cases being contrary to the law pronounced by the Apex Court in Mafatlal Industries and CCE 1996 (12) TMI 50 - SUPREME COURT , Mumbai v. Allied Photographics India Ltd. 2004 (3) TMI 63 - SUPREME COURT referred, cannot be applied to the case of the appellants. Hence, we do not find any illegality in the impugned order and the same is upheld. The appeal of the appellants is dismissed.

Summary

Issues involved:
The issue relates to the applicability of the principle of unjust enrichment to the refund claim of the appellants.

Details of the Judgment:

Applicability of Principle of Unjust Enrichment:
- The lower authorities rejected the refund claim by applying the principle of unjust enrichment.
- The appellants argued that they did not pass on the duty to buyers as there was no change in the price of goods.
- The Revenue contended that the duty incidence was passed on to the buyers.
- The Tribunal reviewed the record which showed the appellants were manufacturing aluminum shapes and sections during 1985-1991.
- The dispute over classification was resolved in favor of the appellants by the Tribunal and upheld by the Apex Court.
- The appellants filed refund claims for duty paid under protest, but the Revenue issued a show cause notice citing unjust enrichment.
- The Tribunal noted that the duty element was separately shown in the invoices, indicating passing on the duty to buyers.
- The Tribunal referred to the law established by the Apex Court in Mafatlal Industries v. Union of India regarding passing on the duty incidence.
- It was observed that stable prices post-duty payment did not prove that duty was not passed on to consumers.
- The Tribunal upheld the impugned order, dismissing the appeal of the appellants based on the principle of unjust enrichment.

Conclusion:
The Tribunal found no illegality in the impugned order and upheld the decision to reject the refund claim based on the principle of unjust enrichment.