TaxTMI 
TaxTMI 
2025 (9) TMI 396
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....ejected by the then Assistant Commissioner vide his Order-in-Original No. 25/87 dated 29.04.1987 on the ground that the impugned goods were classifiable under TI 68 during the period from 26.10.1979 to 19.08.1982 and the assessee has paid the duty of Central Excise correctly therefore the question of allowing refund did not arise. 2. Commissioner (Appeals) upheld the said order. In an appeal against the said order, this Tribunal remanded the matter to the original adjudicating authority. 2.1 During the second round of litigation while relying upon earlier Order-in-Original No. 179 & 180/2001 dated 28.01.2002 the authority sanctioned the refund of the amount of Rs. 10,74,725.06 vide Order-in-Original No. 51/2005 dated 23.12.2005. However it was found that the incidence of duty has been passed on by the appellants hence the amount was credited to Consumer Welfare Fund. The appeal against the said order was decided by Commissioner (Appeals) vide Order-in-Appeal No. 178/2006 dated 23.05.2006 in favour of the assessee holding that the refund was wrongly credited to Consumer Welfare Fund as Unjust Enrichment Doctrine is not applicable decided the appeal vide Order-in-Appeal bearing....
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....s admitted that the proforma credit which was claimed by NEI initially was not admissible to it. Such case is clearly not the case of passing of incidence of tax to NEI by the appellant. The recovery of wrongly claimed credit should have been made from NEI instead the department has wrongly rejected the refund of the appellant. With these submissions, the order under challenge is prayed to be set aside and the appeal is prayed to be allowed. 5. While rebutting the said submissions, learned Departmental Representative has submitted that it is an undisputed fact that the buyers of the appellant took Cenvat credit of the duty paid and the said credit has not been reversed while issuing debit notes to the appellant. In such circumstances by merely issuing debit notes the burden of unjust enrichment cannot be discharged. Hence there is no infirmity when the refund claim has been rejected. In addition the decision of Hon'ble Supreme Court in the case of ITC Limited Vs. CCE Kolkata-2019 (365) ELT 216 (SC) has been relied upon to submit that without the assessment being reopened by the competent authority, refund cannot be granted. In the present appeal, the appellant had filed th....
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....d, was the same for such excess duty was said to be paid by the assessee and sought refund. 25.14 Further M/s NEI had taken proforma credit of the said amount which had to be reversed by them as they have issued debit note but as discussion made in para 21 of OIA No. 178 (MPM)CE/JPR-1/2006 dated 23.05.2006, they had not reversed the amount of proforma credit availed by them despite of the letter CE-20(71)MIC/Refd/R-IV/JPR/04/1027 dated 26.10.2005 and 1160 dated 14.11.2005. Letters even no. 17289 dated 13.03.2020 and 1433 dated 26.06.2020 have also been issued to M/s NEI in this respect but NEI had not replied any of the letters. Thus, I hold that M/s NEI has not reversed the "proforma credit" taken by them. Hence the incidence of duty has been passed on by the assessee to M/s NEI." 8. From the orders as discussed above, the only issue that narrows done to be adjudicated is: Whether the appellant got unjustly enriched despite that its buyer i.e. NEI had issued the debit note? 9. Foremost the provision which is relevant for appreciating the point of unjust enrichment is Section 11B of Central Excise Act, 1944. The perusal thereof establishes that the sine qua ....
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....or an amount which is part of the excise duty paid earlier and passed on. The Assessee who did not bear the burden of the duty, though entitled to claim deduction, is not entitled for a refund as he would be unjustly enriched. 11. It will be useful to refer to the relevant para of Mafatlal Industries Vs. Union of India (supra) in this connection. "108. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the c....