2005 (5) TMI 127 - AT - Central Excise

Summary

Issues:
1. Admissibility of deductions claimed in price lists filed by appellants.
2. Adjustment of duty due against refundable amount and credit to Consumer Welfare Fund.
3. Applicability of Rule 9B of the Central Excise Rules in provisional assessment cases.
4. Whether adjustment of excess duty paid against short payment is permissible.
5. Application of the bar of unjust enrichment in refund claims.

Analysis:

1. The appellants filed price lists claiming deductions from the assessable value of their product 'Nylon 6' Chips. The Assistant Collector allowed some deductions but disallowed others, leading to an assessment order for recovery of Rs. 4.58 crores. The Tribunal remanded the matter for consideration after a Special Bench decision. The Dy. Commissioner later found certain deductions inadmissible, resulting in a short payment of Rs. 89.69 lakhs. The appellants were also held not entitled to a refund due to unjust enrichment, with the amount being credited to the Consumer Welfare Fund.

2. The Department appealed against this order, arguing that the Dy. Commissioner should not have credited the net amount to the Consumer Welfare Fund and should have asked the appellants to pay the due amount. The Commissioner (Appeals) rejected this plea, stating that Rule 9B did not apply as it was not a case of provisional assessment. He emphasized that once a refund is deemed inadmissible due to unjust enrichment, the amount should be credited to the Consumer Welfare Fund without adjusting against any due amount from the assessee.

3. The appellants cited various case laws supporting their contention for adjustment under Rule 9B, including cases of excess duty payment on one clearance and short duty payment on another. However, the Tribunal observed that while adjustment of excess duty paid against short payment is permissible in certain cases, it is not applicable when the assessee admits they are not entitled to a refund due to passing on the excess duty to customers. The Tribunal distinguished the cited cases as they did not address the bar of unjust enrichment.

4. In conclusion, the Tribunal upheld the Commissioner's order demanding the due amount from the appellants, considering their admission of liability and the bar of unjust enrichment. The appeal was rejected based on these findings. The Tribunal emphasized the distinction between cases where adjustment is warranted and situations where the assessee acknowledges the inadmissibility of a refund due to unjust enrichment.