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2017 (3) TMI 643 - AT - Central ExciseRefund claim - unjust enrichment - the price charged by the appellant did not include the element of duty - Held that - It is thus the case of the appellant that though they have mentioned the duty element, the same has not been received from the dealer. To support the contention the appellant has produced the Chartered Accountant certificate who has certified that the duty Incidence has not been passed on to the buyers. - The presumption envisaged in Rule 12B is a rebuttable one. - reliance was placed in the case of Amadalavalasa Cooperative Sugars Ltd. v. CCE, Visakhapatnam 2007 (1) TMI 432 - CESTAT, BANGALORE , Union of India Vs Mulder India (P) Ltd 2006 (8) TMI 210 - HIGH COURT OF KARNATAKA and others - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the refund claim of ?2,84,320/- paid as excise duty on Vermicelli is hit by the doctrine of unjust enrichment. 2. Whether the duty incidence was passed on to the buyers by the appellant. Issue-wise Detailed Analysis: 1. Whether the refund claim of ?2,84,320/- paid as excise duty on Vermicelli is hit by the doctrine of unjust enrichment: The appellants, manufacturers of various goods including Vermicelli, paid excise duty on Vermicelli as directed by the department on 25.03.2011. Subsequently, the department clarified that Vermicelli is not a dutiable product. The appellants filed for a refund of ?2,84,320/- paid as excise duty for the period 24.03.2011 to 13.08.2011. A show cause notice was issued proposing to reject the refund claim on the ground of unjust enrichment. The original authority sanctioned the refund amount but credited it to the Consumer Welfare Fund (CWF). The Commissioner (Appeals) upheld this decision, leading to the present appeal. The appellant argued that the excise duty was mentioned in the invoices due to departmental insistence, but the price of Vermicelli remained unchanged. The duty was calculated by backward calculation, implying that the incidence of duty was not passed on to the buyers. The appellant relied on several judgments to support their claim that the refund is not hit by unjust enrichment. 2. Whether the duty incidence was passed on to the buyers by the appellant: The appellant contended that the price negotiated with the buyers was inclusive of all duties and taxes, and remained constant irrespective of the excise duty payment. They provided a detailed explanation and a Chartered Accountant certificate to substantiate that the duty incidence was not passed on to the buyers. The appellant cited cases such as Kerala Dinesh Beedi Workers C. Co-operative Society Ltd., Union of India Vs Mulder India (P) Ltd., and Amadalavalasa Co-operative Sugars Ltd. to argue that when the price is inclusive of duty, the duty payable becomes zero, and hence, the refund is not hit by unjust enrichment. The respondent, represented by the Assistant Commissioner (AR), argued that the mention of duty in the invoices implies that the incidence of duty was passed on to the buyers, relying on the judgment in Hindustan Lever Ltd vs CCE, Belapur. Judgment Analysis: The Tribunal noted that the appellants paid the duty on Vermicelli only on the department's direction and filed a refund claim for the excess duty paid. The Tribunal examined the appellant's explanation and the Chartered Accountant certificate, which indicated that the duty incidence was not passed on to the buyers. The Tribunal referred to the judgments in Amadalavalasa Co-operative Sugars Ltd. and Kumar Metallurgical Corporation Ltd., which held that when the contract price is inclusive of duty, there is no unjust enrichment if the duty payable is zero. The Tribunal also considered the judgment in Kerala Dinesh Beedi Workers C. Co-operative Society Ltd., where it was held that the refund is not hit by unjust enrichment when the price includes the duty payable. The Tribunal concluded that the presumption of passing on the duty incidence is rebuttable, and the appellant successfully rebutted this presumption. Conclusion: The Tribunal set aside the impugned order, concluding that the refund claim is not hit by unjust enrichment. The appeal was allowed with consequential reliefs, if any.
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