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TMI Blog2024 (8) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... n expense in turn have not passed it on to someone else or have not taken credit of the same and set it of against duties to be paid. This could have been done by way of a Chartered Accountant certificate as is in vogue in the case of certain refunds under a well-defined procedure. In the instant case the appellant agrees that the duty paid by mistake to government had been passed on to the principal contractor under protest. Its their argument that the principal contractor has later withheld payment which exceeds the amount claimed as refund in order to adjust the excise duty already paid to the appellant. No factual proof of the same has been given or placed before the proper officer nor has it been shown that the duty paid by the principal contractor for whom the amount is an expense in turn have not passed it on to someone else or have not taken credit of the same and set it of against duties to be paid. The impugned order categorically mentions that the unjust enrichment hurdle has not been crossed. No request has been filed to present these factual details before the Bench and discharge their onus, even at this distant date. The appellant has hence failed to discharge the bur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test, thereby informing the principal contractor that the duty collected is subject to refund. 2) The OIO in Para 14 acknowledges that the contract is covered under the exemption provided under Notification No. 108/1995 and that it does not require any duty payment. 3) The Appellate Authority records the undisputed fact that the Appellant received letters from the principal contractor which informed that the contract is covered by the Notification so the duty already collected would be recovered from the Appellant and requested not to collect duty in the future. The Appellate Authority also acknowledges that an amount which exceeds the amount claimed under the 3 Refund Applications was withheld by the principal contractor. 4) The principal contractor vide letter dated 12.06.2009 has informed the Appellant that in terms of Notification No.108/1995, the final product can be cleared without payment of duty and requested the Appellant to not charge excise duty on supplies made to the principal contractor. 5) The principal contractor vide letter dated 12.06.2009 had informed that the duty already collected by the Appellant would be recovered by the principal contractor. 6) The principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prevent a person from retaining the duty collected from another, for example his customer, on the one hand and also collect the same money paid as duty from the State on the ground that it has been collected from him contrary to law. I find that the issue of unjust enrichment has been dealt with elaborately under the landmark nine Judge verdict of the Hon ble Supreme Court in Mafatlal industries Ltd Vs Union of India [1997 (89) E.L.T. 247 (S.C.)], decided by a majority of 8:1. Relevant portion of the same is reproduced below; DECISIONS OF THIS COURT WHICH HAVE APPLIED THE DOCTRINE OF UNJUST ENRICHMENT 43. Shiv Shanker Dal Mills etc. v. State of Haryana Ors. etc. [1980 (1) S.C.R. 1170] arose with reference to market fees collected under a provision which was struck down by this Court in Kewal Krishan Puri v. State of Punjab Ors. [1979 (3) S.C.R. 1217]. The enhancement of market fee from two to three percent was held to be bad, whereupon the traders demanded refund of the excess market fee collected from them. This Court held that though refund of the fee so collected may be legally due to the traders, the traders may be repaid amounts only to the extent they have not passed on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons for whose benefit the Marketing legislation was enacted. The Court observed the Section 23A was akin to the provision concerned in Orient Paper Mills Limited v. State of Orissa [1962 (1) S.C.R. 549] which too disabled a dealer from claiming a refund of the fee paid by him, in case he has already passed on the burden to the next purchaser. The approach adopted by this Court in this case meets our respectful approval. 45. State of Madhya Pradesh v. Vyankatlal Anr. [1985 (3) S.C.R. 561] marks a definite milestone in the application of the doctrine of unjust enrichment. In exercise of the power conferred upon him by the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948, the Director of Civil Supplies, issued a notification fixing ex-factory prices of sugar for different sugar factories. The supply price was a little higher than the ex-factory price. The notification required the difference between the supply price and the ex-factory price to be credited to the Madhya Bharat Government Sugar Fund. Pursuant to the demands made by the State, the sugar mills deposited certain amounts into the said Fund under protest and then instituted suits for refund of the amounts so dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on. It is a presumption of fact which a court is entitled to draw under Section 114 of the Indian Evidence Act. It is undoubtedly a rebuttable presumption but the burden of rebutting it lies upon the person who claims the refund (plaintiff/petitioner) and it is for him to allege and establish that as a fact he has not passed on the duty and, therefore, equity demands that his claim for refund be allowed. This is the position de hors 1991 (Amendment) Act - and as we shall point out later, the said Amendment Act has done no more than to give statutory recognition to the above concepts. This is the position whether the refund is claimed by way of a suit or by way of a writ petition. It needs to be stated and stated in clear terms that the claim for refund by a person who has passed on the burden of tax to another has nothing to commend itself; not law, not equity and certainly not a shred of justice or morality. In the case of a writ petition under Article 226, it may be noted, there is an additional factor : the power under Article 226 is a discretionary one and will be exercised only in furtherance of interests of justice. This factor too obliges the High Court to enquire and f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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