2005 (10) TMI 176 - AT - Central Excise

Summary

Issues:
1. Refund claim hit by unjust enrichment.
2. Duty paid under protest.
3. Interpretation of Rule 233B of Central Excise Rules.
4. Process not amounting to manufacture.
5. Procedure under Rule 233B not followed.
6. Refund to be credited to Consumer Welfare Fund.
7. Burden of duty passed on to customers.
8. Eligibility for refund.

Issue 1: Refund claim hit by unjust enrichment
The appellate tribunal dealt with a case where both the Revenue and the Assessee were aggrieved by an order regarding a refund claim. The Commissioner (Appeals) held the refund claim allowable but hit by unjust enrichment, directing the amount to be credited to the Consumer Welfare Fund. The appellants contended that the refund claim was not affected by unjust enrichment as the sales were made in accordance with contracts specifying inclusive prices.

Issue 2: Duty paid under protest
The appellants paid duty under protest due to demands raised by the Revenue. The tribunal considered the argument that duty paid under protest, without following Rule 233B procedures, did not automatically render the demand time-barred. Citing relevant judgments, the tribunal noted that the duty paid under protest did not necessarily pass on to customers.

Issue 3: Interpretation of Rule 233B of Central Excise Rules
The tribunal clarified that the procedures under Rule 233B were considered directory, not mandatory, based on previous judgments. The Revenue's appeal on the grounds of procedure non-compliance was rejected.

Issue 4: Process not amounting to manufacture
The Commissioner (Appeals) held that the process carried out by the appellants did not amount to manufacture, making them eligible for a refund. This decision was based on a previous CEGAT Final Order.

Issue 5: Procedure under Rule 233B not followed
The tribunal confirmed that the Revenue's appeal was dismissed as the Rule 233B procedures were considered directory, not mandatory, based on previous judgments.

Issue 6: Refund to be credited to Consumer Welfare Fund
The Commissioner (Appeals) directed the refund amount to be credited to the Consumer Welfare Fund. However, the tribunal disagreed, stating that the appellants were eligible for a refund as the duty burden had not been passed on to customers.

Issue 7: Burden of duty passed on to customers
The tribunal analyzed that when prices were fixed in contracts inclusive of duties and taxes, the duty burden was not passed on to customers, especially when the appellants maintained the non-excisability of goods stance.

Issue 8: Eligibility for refund
Based on previous judgments and the duty paid under protest, the tribunal allowed the assessee's appeal, directing the refund to be paid to the appellants, as the duty burden had not been passed on to customers.