Whether the refund of duty deposited during investigation is hit by the doctrine of unjust enrichment?

PJ/Case law/2014-15/2199

Case:-COMMISSIONER OF CENTRAL EXCISE, PUNE Vs M/s ROCKET ENGG CORPORATION LTD.

Citation:- 2014-TIOL-364-HC-MUM-CX

Brief facts:- The Deputy Commissioner of Central Excise upheld the respondent's claim for Rs.54,339/-and Rs.39,483/- on the ground of unjust enrichment. In appeal, the Commissioner of Central Excise (Appeals) held as facts that the respondent assessee paid Central Excise Duty of Rs.54,339/- and Rs.39,483/- on 27 August 2002, that is much after clearance of the excisable goods during the period from 1 September 2001 to 31 July 2002. Therefore, it was held that unjust enrichment will not be applicable and directed refund. The appeal by the revenue was dismissed by the Tribunal on a finding of fact that amounts of differential duty were paid subsequent to the clearance of the excisable goods on insistence of the Anti Evasion and thus, the burden of duty was not passed on to the customer.

Appellant’s contention:- Learned counsel for the appellant/revenue, relied upon the decision of the Apex Court in M/s. Sahakari Khand Udyog Mandal Ltd. v/s. Commissioner of Central Excise and Customs, (181) ELT 328 (SC) = (2005-TIOL-48-SC-CX-LB)and Commissioner of Central Excise, Mumbai v/s. Allied Photographics India Ltd., 2004 (166) ELT 3 (SC) = (2004-TIOL-27-SC-CX), wherein the Supreme Court laid down that doctrine of 'unjust enrichment' based on equity is invoked to deny a refund to person unless the person is able to show that he has paid the amount of which refund is sought without having passed on the burden to others.

Respondent’s contention:- The respondent reiterated the contentions made by the lower adjudicating authorities.

Reasoning of judgment:-The learned bench held that the aforesaid decisions are distinguishable, as in this case there were concurrent findings of fact by the Commissioner(Appeals) & the Tribunal that that the respondent assessee has paid the Central Excise Duty of Rs. 54,339/- and Rs. 39,483/-, after clearance of the excisable goods. Moreover, this payment of duty was on insistence of Anti Evasion Branch of the Central Excise Department. Thus, it was held that the burden of duty was not passed on to its customers. In view of the above concurrent findings of fact, in their view, no substantial question of law arises from the impugned order of the Tribunal.

Accordingly appeals were summarily dismissed. No order as to costs.

Comment:- The conclusion drawn from this case is that as the duty was paid on insistence of Anti Evasion Branch of the Central Excise Department and after clearance of the excisable goods, therefore, the burden of duty has not been passed on to the customers. As a result, provisions of unjust enrichment were not relevant in the present case and claim of refund by the assessee was found to be sustainable.

Prepared by:- Prayushi Jain.

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PJ/Case law/2014-15/2199

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