1998 (6) TMI 250 - AT - Central Excise

Summary

Issues involved: Appeal against the order directing credit to National Consumer Welfare Fund, unjust enrichment, interpretation of contract terms regarding excise duty inclusion.

Unjust Enrichment Issue: The appellant entered into a contract with M/s. Indian Oil Corporation for fabrication work and claimed refund after clearing tank wagons on payment of duty under protest. The Assistant Collector rejected the refund claim citing unjust enrichment. The appellant contended that they did not pass on the duty burden to the customer and argued based on contract terms. The Assistant Collector and Collector (Appeals) held that the duty burden was passed on, supported by the customer's certificate. The appellant argued against this, stating they paid duty during the interim period and did not include duty in the contract price.

Interpretation of Contract Terms Issue: The contract rates were inclusive of various charges, but there was no explicit mention of excise duty. The authorities concluded that excise duty was included based on the contract terms. However, the Tribunal disagreed, stating that the absence of specific mention of excise duty does not imply its inclusion. The Tribunal emphasized that the price was a lump sum amount and the mention of inclusive of all duties and taxes was to avoid future demands, not necessarily for excise duty. The Tribunal also highlighted the lack of evidence regarding the breakdown of the lump sum amount to determine if excise duty was factored in.

Judgment: The Tribunal found that the Assistant Collector erred in concluding that the rates included excise duty, as the appellant had consistently argued against the dutiability of the goods. The Tribunal noted that the appellant had disputed duty liability with the department and had paid duty under protest. The Tribunal also considered the lack of information regarding customer advice on availing Rule 173H, indicating that the duty burden was not transferred to the customer. Therefore, the Tribunal set aside the order directing credit to the Consumer Welfare Fund and held that the appellant was entitled to a refund in cash or credit to their Personal Ledger Account.