2018 (4) TMI 157 - AT - Central Excise

Successful appeal allows refund of duty on HDPE Tapes, rejecting unjust enrichment principle. Tribunal rules in favor.

M/s Ahmedabad Packaging Industries Ltd. Versus Commissioner of Central Excise, Ahmedabad

The appeal regarding the refund of duty paid on HDPE Tapes was successful as the Ld. Commissioner (Appeals) allowed the refund claim, overturning its ... Interest on delayed refund - the refund amount was sanctioned to the appellant on 30.04.1996 by the Adjudicating Authority, but, transferred to the Consumer Welfare Fund, as the appellant failed to establish that the burden of duty has not been passed on to others. The said order was reversed on appeal and the amount was paid to the appellant on 27.10.1999 - whether the appellant would be entitled to interest on delayed refund? Held that: - Consequent to the principle laid down by the Hon’ble Supreme Court in the case of UOI Vs. Solar Pesticides (P) Ltd. [2000 (2) TMI 237 - SUPREME COURT OF INDIA], observing that the principle of Unjust enrichment is applicable to refund of duty on goods captively consumed, this Tribunal remanded the matter to the Adjudicating Authority with the liberty to the appellant to produce evidences to establish that the incidence of duty has not been passed on to others - Consequently, the appellant produced the evidences before the Adjudicating Authority and established that the incidence of duty has not been passed on to others. There was no basis for denying interest on delayed refund to the appellant - appeal allowed - decided in favor of appellant. Issues:1. Refund of duty paid on HDPE Tapes during a specific period.2. Transfer of refund claim to Consumer Welfare Fund on grounds of unjust enrichment.3. Appeal against the transfer of refund claim and subsequent proceedings for interest on delay.4. Dispute regarding the admissibility of interest for the delay in refunding the amount.5. Application of the principle of unjust enrichment to goods captively consumed.6. Consideration of evidences to establish the burden of duty not passed on to others.7. Interpretation of relevant judgments by the Hon'ble Bombay High Court and Hon'ble Gujarat High Court.8. Final decision on the appeal and consequential relief.Analysis:1. The appeal was filed concerning the refund of duty paid on HDPE Tapes during a specific period. The appellant became eligible for the refund following a decision in their favor. The refund claim was initially transferred to the Consumer Welfare Fund due to unjust enrichment concerns.2. The Ld. Commissioner (Appeals) set aside the transfer of the refund claim to the Consumer Welfare Fund, allowing the refund claim after observing that the principle of unjust enrichment does not apply to goods captively consumed. The refund claim was subsequently sanctioned to the appellant.3. The appellant also claimed interest for the delay in receiving the refund amount. Despite the Adjudicating Authority sanctioning the interest, the Revenue appealed the decision, leading to a series of proceedings and appeals regarding the interest amount.4. The main contention revolved around the admissibility of interest for the period of delay in refunding the amount. The appellant argued that a previous Tribunal order had conclusively decided in their favor regarding the interest amount.5. The Revenue, on the other hand, contended that certain facts were not considered in the previous Tribunal order, and if reviewed, the appellant might not be eligible for the interest amount due to default on their part.6. The issue of unjust enrichment concerning goods captively consumed was crucial in determining the eligibility for the interest amount. The appellant had to produce evidences to establish that the burden of duty claimed as a refund was not passed on to others.7. The Tribunal analyzed relevant judgments by the Hon'ble Bombay High Court and Hon'ble Gujarat High Court to interpret the applicability of the principle of unjust enrichment in the present case. The Tribunal ultimately found in favor of the appellant, citing the production of evidences to support their claim.8. The final decision set aside the impugned order and allowed the appeal, providing consequential relief as per the law. The Tribunal emphasized the importance of following established legal principles and evidences presented in determining the outcome of the case.