Unjust enrichment is applicable when duty deposited under protest?

PJ/Case Laws/2012-13/1165

CASE:- COMMISSIONER OF CENTRAL EXCISE, KOLKATTA-VII VERSUS KRYPTON INDUSTRIES.

CITATION:- 2012 (281) E.L.T. 431 (Tri- Kolkata)

ISSUE:- Unjust enrichment is applicable when duty deposited under protest?

BRIEF FACTS: -The facts of the case are that the respondent submitted a refund claim of Rs. 2,27,963/- for the deposit towards 10% of total price of exempted goods. Earlier the demand confirmed by lower adjudicating authority was set aside vide order in appeal No. 32/KOI-V11/2009 dated 17-9-2009.Consequently they filed a refund claim of the deposit. The lower adjudicating authority sanctioned the claim. The Revenue challenged the order before the Commissioner (Appeal) who also upheld the lower adjudicating authority's order and set aside the appeal filed by the Revenue.
Revenue is in appeal against order in appeal No. 24-25/Kol-V11/2011 dated 9-2-2011 whereby Commissioner (Appeal) upheld the lower adjudicating authority's order granting the refund.

APPELLANT’S CONTENTION: -The contention of appellant is that the respondent could not discharge the burden that the incidence of the duty has been passed on to their customers; therefore the Commissioner (Appeal) has erred in allowing the refund claim. In support of their contention they have relied upon the Tribunal's decision in the case of Commr. of C. Ex., Pune-1 v. Poona Rolling Mills Ltd. reported in 2007 (220) E.L.T. 907 (Tri.-Mumbai) = 2009 (15) S.T.R. 643 (Tn. - Mumbai) & Sahakari Khand Udyog Mandal Ltd. v. Commr. of C. Ex. & Customs reported in 2005 (181) E.L.T. 328 (S.C.).

RESPONDENT’S CONTENTION: -The contention of the respondent is that it is a case of refund of deposit and not of duty therefore the question of unjust enrichment is not applicable to their case and accordingly both the lower authorities have given cogent findings, in this regard. The respondent also filed counter styled as cross objection. The respondent also placed reliance on the decision of this Tribunal in the case of Jayketan Marketing & Clothing v. CCE, Belapur reported in 2009 (240) E.L.T. 263.

REASONING OF JUDGEMENT: - The respondent deposited the amount at the investigation stage and the proceeding initiagd against them were dropped by Ld. Commissioner (Appeals)It is a case of refund of deposit of duty and not a refund of duty therefore the principle of unjust enrichment which is applicable to refund of duty is not applicable in this case. So far as the Tribunal's decision in the case of Poona Rolling Mills Ltd. (supra), the case was remanded for examining as to whether the respondents passed on duty burden to their customers. In the case of Sahakari Khand Udyog Mandal Ltd. (supra) by the Ld. A.R., while dealing with the case of rebate on excess production of sugar the Hon'ble Supreme Court held that "all the authorities below have expressly recorded a finding that the appellant-Mandal has recovered the amount from consumers and as such excise duty is passed on to consumers/customers". In the instant case the Department could not bring out that the respondent has passed on the burden of the incidence that the deposit has been passed on to its customers. This Tribunal in the case of Jayketan Marketing and Clothing (supra) held that 'unjust enrichment' is not applicable where amount deposited under protest. It is not in dispute that the deposit in the instant case was made under protest and Department has not been able to bring out anything contrary. In view of the above, Tribunal do not find any reason to interfere with the concurrent findings of the lower authorities. The Department's appeal, which is devoid of merit, is dismissed and Commissioner (Appeals) order is upheld. The counter filed by the respondent, styled as Cross Objection is also disposed of accordingly.

DECISION: -Appeal dismissed.

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PJ/Case Laws/2012-13/1165

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