2015 (10) TMI 717 - HC - Central Excise

Denial of refund claim - Unjust enrichment - Whether on the facts and circumstances of the case, the Tribunal was justified in law in holding that merely because the appellant had charged uniform prices from all its customers, it would be treated that the burden of excise duty had been passed on so as to deny the refund on the ground of unjust enrichment - held that - Appellant applied for refund, which was rejected on the ground, that it amounts to unjust enrichment. The sole contention of the appellant was that they had deposited the duty under protest and that they had not passed on the sale duty to its customers, inasmuch as, the sale price remained constant prior to the imposition of duty and after the imposition of duty which leads to a presumption that the duty was not passed on the customers. The fact, that the sale price remained constant does not lead to a conclusion that the duty has not been recovered from the customers as held by the Supreme Court in CCE, Mumbai-II vs. Allied Photographics India Ltd., 2004 (3) TMI 63 - SUPREME COURT OF INDIA - Decided against assessee.

Summary

Issues: Refund application rejection on grounds of unjust enrichment

Analysis:
The judgment by the Allahabad High Court dealt with the rejection of a refund application on the grounds of unjust enrichment. The primary issue revolved around whether the appellant had passed on the excise duty burden to its customers, thereby disentitling them from the refund. The appellant contended that they had not passed on the duty to customers as the sale price remained constant before and after the imposition of duty. However, the court referred to the Supreme Court ruling in CCE, Mumbai-II vs. Allied Photographics India Ltd., emphasizing that uniformity in price does not necessarily indicate that the duty has not been recovered from customers. The court highlighted that various factors could contribute to price uniformity. Consequently, the court concluded that the appellant had failed to establish a case for refund based on the principles laid down by the Supreme Court.

The court further emphasized that in the absence of any conflicting decisions, the matter was conclusively settled by the Supreme Court's decision. Therefore, the court answered the substantial question of law against the appellant and dismissed the appeal. The judgment underscores the importance of proving that the duty burden has not been passed on to customers to succeed in a refund claim. The court's reliance on precedent and established legal principles highlights the significance of legal precedents in resolving tax disputes related to unjust enrichment.