2005 (98) ECC 127 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(S)

Shri P.S. Bajaj, Member (J)

Manohar Lal Hira Lal Ltd.

Versus

CCE, Ghaziabad

Appeal No. E/371/2004-NB(S)

[Arising out of Order-in-Appeal No. 397-CE/GZB/03, dated 13.10.2003 passed by the Commissioner of Central Excise (Appeals), Ghaziabad]

Final Order No. A/1245/2004, NB(S), dt. 2.8.2004, Certified on 29.9.2004

Refund (C. Excise)

Unjust enrichment -- When appellant had already passed on the incidence of duty to the buyers of the goods, they had no right to claim back the refund from the Department, and the principle of unjust enrichment can be invoked -- Appellant failed to discharge burden of proof that he had not passed on the incidence of duty to ultimate consumer, not entitled to the refund of the amount.

Appeal dismissed

PRESENT :

Shri S.C. Jain, Adv. for the appellants.

Shri Randhir Singh, SDR for the respondent.

Case Cited :

Mafatlal Indus. Ltd. v. Union of India, 2002 (83) ECC 85 (SC)........................... [Paras 2, 5]

Per : P.S. Bajaj

In this appeal which has been filed by the appellants against the impugned Order-in-Appeal, the issue relates to the applicability of principle of unjust enrichment to the refund claim of the appellants. The authorities below have rejected the refund claim of the appellants of Rs. 32,779 by applying this principle.

2. The learned counsel has contended that the price of the goods charged by the appellants was a tentative price and that Rule 9-B had no application and that the buyers of the goods had already reversed the excess credit availed by them earlier. The learned counsel has also referred to the Apex Court's judgment in the case of Mafatlal Indus. Ltd. v. Union of India, 1997 (89) ELT 247 (SC), to further contend that excess amount of duty paid by the appellants is refundable by the Department.

3. On the other hand, the learned JDR has reiterated the correctness of the impugned order.

4. I have heard both sides and gone through the record. The perusal of the record shows that the appellants filed the refund claim on the ground that they supplied the goods i.e. Steel Wires to M/s Parvat Wires, Kathgodam, at tentative price and that price was later on negotiated and finalized on the lower side, than the price which was recorded in the invoices of the goods. But there is nothing on the record to suggest if they ever intimated to the Department that the price at which they supplied the goods to their buyers was a tentative price. They also never asked for the provisional assessment. The duty was correctly paid by them on the price as indicated by them in the invoices at the time of clearance of the goods. Subsequent negotiations between the appellants and the buyers on the price of the goods did not cloth the appellants with a right to claim the refund of the duty. The alleged reversal of the excess credit by the buyers of the goods also did not help the appellants in claiming the refund of the duty.

5. When the appellants had already passed on the incidence of duty to the buyers of the goods, they had no right to claim back the refund from the Department, and the principle of unjust enrichment has been rightly invoked by the authorities below. The ratio of the law laid down by the Apex Court in the case of Mafatlal Industries Ltd., supra, rather goes against the appellants instead of helping them. In that case, it has been ruled that nobody can be allowed to become rich by collecting duty from both the hands. Every assessee, who claims the refund of duty, has to satisfy that he had not passed on the incidence of duty to the ultimate consumer. The appellants, therefore, having failed to discharge this burden of proof, are not entitled to the refund of the amount.

5. In view of the discussion made above, I do not find any illegality in the impugned order and the same is upheld. The appeal of the appellants is dismissed.

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