2016 (11) TMI 1203 - AT - Central Excise

Manufacturer wins refund case challenging unjust enrichment doctrine, clarifying duty burden transfer in excise matters.

The Tribunal ruled in favor of the appellant, a manufacturer of electronic energy meters, directing the revenue authority to grant a refund of excess ... Refund - Principles of unjust enrichment - periodical revision of the price depending on the price prevailing in the market - whether the appellant have passed on the burden of Central Excise Duty and accordingly the amount found refundable to them have been rightly transferred to consumer welfare fund? - Held that: - the appellant have not received a single rupee more than the settled amount of ₹ 600/- per meter from the buyers. We further, notice that there is no dispute as regards this fact and the entitlement of refundable amount is not in dispute. So far the issue of unjust-enrichment in concerned we hold that under the admitted facts, the appellant has not received a single rupee more than the settled amount of ₹ 600/- per meter from the buyers, there is no case of unjust enrichment made out. Accordingly relying on Ruling of Apex Court in the case of HPL Socomax Ltd. [2015 (5) TMI 492 - SUPREME COURT] we hold that the appellant is entitled to refund. Allowing the appeals of the appellant we direct the revenue authority to grant the refund within 90 days from the receipt of this order along with interest as per the Rules - appeal allowed. Issues:1. Whether the appellant passed on the burden of Central Excise Duty, leading to the transfer of the refundable amount to the consumer welfare fund.Analysis:1. The appeals revolve around the issue of whether the appellant, a manufacturer of electronic energy meters, passed on the burden of Central Excise Duty, justifying the transfer of the refundable amount to the consumer welfare fund. The purchase orders with M/s UHBVNL and M/s DHBVNL specified a variable price clause, subject to periodic review, despite the initial rate being inclusive of duties. The appellant subsequently claimed a refund of excess Excise Duty paid, citing the final settled price of Rs. 600 per meter paid by the buyers, lower than the originally paid duty of Rs. 141.78 per meter.2. The Assistant Commissioner, in the initial order, credited the refundable amount to the consumer welfare fund based on the doctrine of unjust enrichment, as the duty incidence was deemed to have been passed on to the buyers. The Commissioner (Appeals) upheld this decision, emphasizing the onus on the appellant to prove non-passing of duty burden, which they failed to establish despite presenting supporting documents.3. The appellant, relying on a Supreme Court ruling in a similar case, argued that they did not receive any amount exceeding the settled price per meter, thus disputing the unjust enrichment principle. The Supreme Court's decision in the referenced case highlighted the novation of the purchase order, resulting in a revised lower price per meter, warranting a refund of the excess duty paid based on the original higher rate.4. The Tribunal concurred with the appellant's argument, noting the absence of evidence supporting unjust enrichment as the appellant did not receive more than the settled price per meter. Consequently, the Tribunal directed the revenue authority to grant the refund along with interest within 90 days, aligning with the Supreme Court's ruling and rejecting the application of unjust enrichment in this scenario.5. The judgment underscores the significance of establishing the non-passing of duty burden to claim a refund, emphasizing the need for concrete evidence to support assertions regarding duty incidence. The case sets a precedent for refund claims based on revised price agreements and highlights the legal implications of passing on duty burdens in commercial transactions involving excisable goods.