2000 (5) TMI 88 - AT - Central Excise

Unchanged sale prices after duty hike: whether excess duty refund is barred by unjust enrichment; refund allowed.

The dominant issue was whether refund of excess duty was barred by unjust enrichment where the sale price remained unchanged despite an increase in the ... Refund - Unjust enrichment - Whether the bar of unjust enrichment will apply in cases where the price has remained the same inspite of increase in the rate of duty. - HELD THAT:- We fully agree with ld. Advocate that as no change has taken place in the price structure of the product after increase in the rate of duty, it cannot be said that the incidence of higher rate of duty has been passed on to the customer. The Tribunal has been taking consistently the same view as reported in the decisions relied upon by the ld. Advocate. As the incidence of duty has not been passed on to the customers, the refund of the excess duty is admissible to the appellants and accordingly the appeal is allowed. Issues involved: Whether the bar of unjust enrichment applies when the price remains the same despite an increase in the rate of duty.Summary:The appeal was filed by M/s Swarup Fibres Industries Ltd. regarding the classification of their product under the Central Excise Tariff and the rejection of their refund claim based on the passing of duty incidence to customers. The appellant argued that despite the increase in duty rate, the price structure remained unchanged, indicating that the excess duty was absorbed by them and not passed on. The Department contended that the duty incidence had been passed on to customers, justifying the denial of the refund. After considering both arguments, the Tribunal agreed with the appellant that since there was no change in the price structure post-duty increase, the duty incidence was not passed on to customers. Citing previous decisions, the Tribunal allowed the appeal, stating that the refund of excess duty is admissible to the appellants.