2000 (6) TMI 593 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement of refund for duty paid by the manufacturer for clearances during 1974-1984.
2. Entitlement to file the refund claim consequent to the judgment in Mafatlal Industries v. U.O.I.
3. Limitation under the Central Excise Law for filing the refund claim.
4. Proof of non-passing of duty burden to consumers (unjust enrichment).

Detailed Analysis:

Issue 1: Entitlement of Refund for Duty Paid by Manufacturer
The respondents, appointed as sole distributors of Photographic Printing Papers, paid Central Excise duty amounting to Rs. 1,25,34,988.97. The refund claim arose after the Supreme Court's judgment in the Bombay Tyres International case. The Assistant Commissioner initially granted the refund after verifying invoices and Chartered Accountant's certificates, concluding that the duty burden was not passed on to consumers.

Issue 2: Entitlement to File Refund Claim Post-Mafatlal Judgment
The Supreme Court in Mafatlal Industries case allowed petitioners to file refund claims within sixty days from the judgment date if they had pending writ petitions or suits. The respondents filed the refund claim within this period, complying with the Supreme Court's directive. The Assistant Commissioner and Commissioner (Appeals) both upheld the respondents' entitlement to file the refund claim.

Issue 3: Limitation Under Central Excise Law
The refund claim was challenged on the grounds of limitation. However, as per paragraph 100 of the Mafatlal judgment, the respondents filed the claim within the specified period of sixty days. The Commissioner (Appeals) confirmed that the claim was within the limitation period, and this was upheld by the Tribunal.

Issue 4: Proof of Non-Passing of Duty Burden (Unjust Enrichment)
The burden of proving non-passing of the duty burden lies with the claimant. The respondents provided affidavits, invoices, and Chartered Accountant's certificates to substantiate their claim. The Assistant Commissioner verified these documents and concluded that the duty burden was not passed on to consumers. The Commissioner (Appeals) affirmed this finding, noting that no new evidence was presented by the department to counter the respondents' claim.

Conclusion:
The appeal by the department was dismissed, and the cross-objection by the respondents was allowed, entitling them to the refund amount with 12% interest from the date of withdrawal by the department, as per the Bombay High Court's order. The Tribunal emphasized the need for the department to comply promptly with the refund order, given the protracted nature of the case.