TMI Blog2009 (6) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... f fine or penalty – held that doctrine of unjust enrichment is applicable – burden is on department to show that incidence of duty is passed - in my considered view, the doctrine of unjust enrichment based on equity would work in the reverse direction vis-à-vis the doctrine as embodied in Section 11B of the Central Excise Act, Section 27 of the Customs Act and similar statutory provisions. - Fine and penalty stand on a different footing. Both are penal in nature. The law does not permit transfer of penal liability by a person who has been found to have committed an offence, to another person who has not. In other words, a penal liability is not transferable. Neither the Customs Act nor the Central Excise Act provides for recovery of fine or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt is not applicable to the instant case. 3. On the other hand, the learned S.D.R. refers to para 48 of the Supreme Court's judgment and submits that, as held in that para, any claim for refund irrespective of the refund provisions of the Central Excise Act and the Customs Act would attract the bar of unjust enrichment based on equity. It is also pointed out that another co-ordinate Bench of the Hon'ble Supreme Court followed the ruling given in Sahakari Khand Udyog Mandal Ltd.'s case (supra) and held that the doctrine of unjust enrichment was applicable to a claim for refund of deposit irrespective of Section 11B of the Act. The S.D.R. has also relied on the Tribunal's decision in United Spirit Ltd. v. Commissioner of Customs (Import), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apex court's ruling rendered in Sahakari Khand Udyog Mandal Ltd.'s case (supra). Para 48 of the Apex Court's judgment is reproduced below : 48. From the above discussion, it is clear that the doctrine of 'unjust enrichment' is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 27 of the Customs Act, the doctrine could be invoked to deny refund to a person who is otherwise entitled. Section 27 of the Customs Act and the corresponding Section 11B of the Central Excise Act have given legislative recognition to the above doctrine. These provisions govern claims for refund of (duty) and therefore the present appellant has argued that their claim for refund of fine or penalty should be allowed in absolute terms without the bar of unjust enrichment. In arguing so, the appellant has lost sight of the scope of the ruling of the apex court. According to that ruling, the doctrine of unjust enrichment is based on equity and the same has ever been in existence in common law. As regards the claim for refund of duty, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reason why the statutes have raised the presumption in favour of the Revenue thereby making it obligatory for the claimant to discharge the liability of showing that the burden of duty has not been passed on. Fine and penalty stand on a different footing. Both are penal in nature. The law does not permit transfer of penal liability by a person who has been found to have committed an offence, to another person who has not. In other words, a penal liability is not transferable. Neither the Customs Act nor the Central Excise Act provides for recovery of fine or penalty by a person from any other person. In this scenario, where a person claims refund of fine or penalty, there can be no presumption that he has passed on this incidence to an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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