1998 (6) TMI 310 - AT - Central Excise

Summary

Issues:
Classification of products, refund claim under Section 11B of the Central Excise Act, unjust enrichment, interpretation of "any other person" in Section 11B, duty passed on to buyer, eligibility for refund.

Classification of Products:
The appellants, manufacturers of copper alloy and aluminum articles, claimed classification under Chapter 74 and 76 of CETA, while the Jurisdictional Asstt. Commissioner classified their products under Chapter 84 and 87. The Commissioner (Appeals) approved the classification as claimed by the appellants, setting aside the Asstt. Commissioner's order. The appellants claimed a refund of duty paid under protest. The Asstt. Commissioner rejected the refund claim, stating that duty amount had already been recovered from the customer. The Commissioner (Appeals) noted that amended provisions of Section 11B incorporate unjust enrichment criterion for granting refunds.

Refund Claim under Section 11B:
The appellants contended that refund could be made if duty had not been passed on to any other person, interpreted as the ultimate consumer. They relied on judicial precedents to support their claim that as long as duty had not been passed on to the ultimate consumer, refund cannot be denied. The appellants paid duty under protest and collected it from the customer, with an agreement to refund the amount. However, the Department contended that duty burden was passed on to the customer, who utilized the material in manufacturing irrigation equipment.

Unjust Enrichment and Eligibility for Refund:
The refund claim was denied based on unjust enrichment, as the duty burden was passed on to the buyer who consumed the material in manufacturing the final product. The certificate from the Central Excise Supdt. confirmed that the buyer had paid duty and was exempted from duty under a notification. The amended provisions of Section 11B were found applicable, where the manufacturer could be granted a refund if duty burden had not been passed on to any other person. As the appellants passed on the duty burden to the buyer, they were deemed ineligible for a refund. The buyer, as the consumer of the goods, was required to apply for the refund under the law.

Conclusion:
The Tribunal rejected the appeal, emphasizing that the duty burden had been passed on to the buyer, who consumed the material in manufacturing the final product. As per Section 11B, the appellants were not eligible for a refund, and it was the buyer's responsibility to apply for the refund. The relevant date for the buyer to apply for a refund was the date of purchase of the goods. Therefore, the appellants, having passed on the duty burden, were not entitled to a refund, and the impugned order was upheld.