TaxTMI 
TaxTMI 
2016 (6) TMI 825
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.... to August 2008. The department entertained the view that R&D was not part of manufacturing activity and that the benefit of exemption from payment of duty cannot be extended to inputs used for R&D purpose. It is the case of the appellant that due to pressure from Department, the appellant made payment of Rs. 7,44,520/- and informed the Department. ii. The show cause notice was adjudicated and the original authority confirmed the demand of Rs. 7,44,520/-. The appellant filed appeal before the Commissioner(Appeals). After considering the materials and submissions, the Commissioner(Appeals) vide order dated 31/07/2012 held that the appellants are not liable to pay any duty on the inputs procured and used for R&D.&nb....
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....r Notification No.52/2003-Cus. dated 31/03/2003 (on imported raw material) and Notification No.22/2003-CE dated 31/03/2003 (domestically procured inputs). As such no duty was to be paid on these inputs. The amount was paid during investigation on pressure from Department. The refund is now denied as being hit by unjust enrichment. Only reason for reaching the conclusion that the incidence of duty has been passed on to another is that the appellant showed the amount paid as expenditure. He submitted that the amount was paid only because of pressure from the Department. It was paid during the time of investigation and that therefore it is only a deposit and the doctrine of unjust enrichment is not applicabl....
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....ubmitted that the Commissioner(Appeals) has rightly sanctioned the refund and ordered it to be transferred to the Consumer Welfare Fund. 4. I have heard the rival submissions. The issue is whether the refund claim is hit by unjust enrichment. Section 11B provides for refund of excess duty or tax paid. It also lays down that the claim of refund has to pass the test of unjust enrichment. In the case in hand, the appellant did not pay duty as according to them no duty was payable on the inputs procured and used for R&D. However, Department entertained a view that duty is payable. Proceedings were initiated and appellant paid the duty demand and contested the issue. In appeal, it was held that ....
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....he Department to establish the details of such passing of incidence of duty. It cannot be based on assumptions that incidence of duty is passed on. 6. In Universal Heat Exchangers Ltd. Vs. CCE, Coimbatore [2015(329) ELT 936 (Tri. Chennai)], the co-ordinate Bench of Tribunal held that unjust enrichment is not applicable to duty deposited during audit. Similar view was taken in Advance Steel Tubes Ltd. Vs. CCE, Ghaziabad [2014(310) ELT 310 (Tri. Del.)]. The Honble High Court in the case of CCE, Pune-I Vs. Sandvik Asia Ltd. [2015(323) ELT 431 (Bom.)] held that merely because amount is shown as expenses in accounts, it cannot be presumed that incidence of duty has been passed on to consumers. 7. The cases re....