2000 (4) TMI 271 - AT - Central Excise

Summary

Issues involved: Appeal filed by Revenue challenging denial of refund claim based on duty passed on to customers and application of principle of unjust enrichment.

Issue 1 - Denial of refund claim by Commissioner (Appeals):
The Revenue contended that the Commissioner (Appeals) failed to appreciate that duty amount was charged from customers through invoices, and misapplied the judgment in a previous case. They argued that the duty liability was passed on to customers, and subsequent credit notes issued did not change this fact. The Revenue cited a case where the duty was held liable to be credited to the Consumer Welfare Fund (CWF), a decision upheld by the Supreme Court.

Issue 2 - Application of principle of unjust enrichment:
The Revenue emphasized that duty was clearly charged and collected from customers as evidenced by the invoices, making the principle of unjust enrichment applicable. The Respondent, however, argued that the issue had already been addressed in a previous Tribunal decision.

Upon review, the Assistant Commissioner denied the refund claim due to lack of evidence supporting the assertion that the excise duty was not passed on to buyers. In contrast, the Commissioner (Appeals) accepted the claim based on an affidavit and the precedent set by a previous Tribunal decision. The Tribunal's stance, as upheld by the Apex Court, was that duty paid at the time of goods clearance, with credit notes issued later, did not transfer the duty incidence to customers. Consequently, the appeal filed by the Revenue was accepted, and the decision was in favor of the department.