Refund claim denied as unjust enrichment presumption under Section 12B upheld; assessee fails to disprove duty pass-through

SC upheld the Tribunal's rejection of the assessee's refund claim of central excise duty on the ground of unjust enrichment under Section 12B of the Central Excise Act, 1944. It affirmed that the statutory presumption applied and that the onus squarely lay on the assessee to prove that the duty incidence was not passed on to customers. As the assessee failed to provide precise cost data for components of its final product, reliance on the Assistant Director's weighted average cost report was held proper. Finding no infirmity in the Tribunal's reasoning or conclusions, SC dismissed the civil appeals without costs.

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Assessee sought refund of central excise duty; the claim was rejected on the ground of unjust enrichment. The core issue before the Tribunal was whether the assessee had passed on the duty burden to its customers, attracting the presumption under Section 12B of the Central Excise Act, 1944. The burden lay on the assessee to rebut this presumption by proving that the incidence of duty had not been passed on. The Department referred the matter to the Assistant Director to scrutinize the assessee's "cost construction method." Because the assessee failed to furnish exact cost attributable to the various components of its final product (PCTR), the Assistant Director prepared a report based on "weighted average cost." The Tribunal accepted this report and held that the assessee had not discharged its onus under Section 12B. The Supreme Court found "no infirmity" in the Tribunal's judgment and dismissed the civil appeals without costs.

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