2014 (4) TMI 414 - AT - Central Excise

Denial of refund claim - unjust enrichment - finalization of provisional assessment - Held that - Commissioner (Appeals), rightly allowed the amount of refund upto 24.06.1999 following the decision of the Hon ble Supreme Court in the case of Mafatlal Industries (1996 (12) TMI 50 - SUPREME COURT OF INDIA). Thereafter, the principle of unjust enrichment is applicable as per amendment of Rule 9B of the erstwhile Central Excise Rules, 1944 by Notification No.45/99- CE( NT), dated 25.06.1999 - principle of unjust enrichment would be applicable even in the case of captive consumption - consistency of price of final goods of the assessee did not materially lead to the conclusion that incidence of duty had not passed on to the customers. We find that in the instant case, no serious attempt has been made on the part of the appellant neither before the Commissioner (Appeals) nor before this Tribunal so as to establish that the incidence of duty has not been passed on to the customers - Decided against assessee.

Summary

Issues:
Refund claim rejection based on unjust enrichment principle.

Analysis:
The appellant, engaged in manufacturing "components of lifts," filed a refund claim of Rs.80,60,061/- for the period from 1987 to June 2000. The Assistant Commissioner rejected the claim, citing the appellant's failure to prove that duty incidence wasn't passed on to customers. The Commissioner (Appeals) partially allowed a refund of Rs.62,97,533/- up to June 24, 1999, following a Supreme Court decision. However, the balance refund claim of Rs.17,62,528 post-June 25, 1999, was denied due to the unjust enrichment principle incorporated in Rule 9B from that date.

The appellant's counsel argued that the rejection lacked reasoning and unjust enrichment shouldn't apply as goods were sold at a fixed price without duty variations. Referring to a Tribunal case, the counsel requested a chance to present evidence. The Revenue's representative opposed the appeal, supporting the Commissioner's decision and highlighting the consistent application of unjust enrichment even with unchanged prices.

The Tribunal upheld the Commissioner's decision, allowing the refund until June 24, 1999, as per Supreme Court precedent. Post-June 25, 1999, the unjust enrichment principle applied due to Rule 9B amendment. Citing another Supreme Court case, the Tribunal emphasized that uniform pricing doesn't negate unjust enrichment. They noted the appellant's failure to prove duty non-passing to customers, aligning with previous decisions. Consequently, the appeal was dismissed, affirming the Commissioner's order.