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Issues: Whether the refund of excise duty paid on Vermicelli, which was shown in the invoices but allegedly not recovered from buyers because the contract price remained unchanged and was inclusive of duty, was hit by unjust enrichment under the statutory presumption.
Analysis: The burden under Section 12B of the Central Excise Act, 1944 is rebuttable. The evidence showed that the assessee had paid duty only on departmental insistence, had fixed the sale price in advance, and had merely back-calculated the duty element for invoice purposes without increasing the price charged to buyers. The Chartered Accountant's certificate and the pricing pattern supported the assertion that the incidence of duty was not passed on. Applying the principle that where the contract price is inclusive of duty and the duty element is shown only for calculation, refund is not barred by unjust enrichment, the claim was held admissible.
Conclusion: The refund was not hit by unjust enrichment and was allowable in favour of the assessee.
Final Conclusion: The impugned order crediting the refund to the Consumer Welfare Fund was set aside and the appeal was allowed with consequential relief.
Ratio Decidendi: The statutory presumption of passing on the duty burden under Section 12B can be rebutted where the assessee proves that the contract price was fixed and inclusive of duty and that the excise element was not recovered from the buyer.
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