1985 (12) TMI 171 - AT - Central Excise

Summary

Issues:
Claim for refund of duty based on notification No. 83/83, Applicability of the theory of unjust enrichment, Entitlement to refund under Section 11B of the Central Excises and Salt Act, 1944.

Analysis:

1. The Asst. Collector of Central Excise rejected the claim for refund of duty by the appellants, citing lack of evidence of intention to refund duty to the buyer. The Collector of Central Excise (Appeals) upheld the rejection based on the appellants' voluntary duty payment and the principle that duties paid to the Exchequer cannot be refunded if the benefit does not pass on to the consumer.

2. The appellants had filed a declaration indicating their clearances would not exceed Rs. 25 lakhs and claimed the benefit of notification No. 83/83. However, due to non-supply of safety valves by customers, their clearances were lower than anticipated, leading to a claim for refund within the prescribed period under Section 11B of the Act. The appellants referenced a Tribunal decision and a Bombay High Court case to support their claim.

3. The Departmental Representative argued that the notification benefits only small-scale sector units, which the appellants did not hold themselves out to be. They also cited a Delhi High Court case to support the position that duty cannot be refunded if there was no intention or possibility of returning the duty amount to customers.

4. The Tribunal found the appellants entitled to the notification benefit as their clearances were within the limit set by the notification. The appellants had initially declared their clearances would not exceed the limit and provided sufficient explanation for the discrepancy due to non-supply of safety valves.

5. The Tribunal addressed the theory of unjust enrichment, emphasizing that even in extraordinary writ jurisdiction cases, different approaches exist regarding this theory. The decision of the Delhi High Court cited by the Departmental Representative was deemed irrelevant in the context of the present case.

6. The Tribunal disagreed with the notion that an assessee who voluntarily paid duty in excess is not entitled to a refund, highlighting the importance of Section 11B in the Act. Denying such refunds would undermine the purpose of such provisions.

7. Ultimately, the Tribunal allowed the appeal, granting consequential benefits to the appellants based on the findings and analysis presented during the proceedings.