2003 (9) TMI 429 - AT - Central Excise

Summary

Issues:
1. Whether refund of duty paid by M/s. BEC Foods is sanctionable.
2. Whether the refund is hit by the principle of unjust enrichment.

Analysis:

Issue 1:
In Appeal No. E/1639/2001-B, M/s. BEC Foods claimed a refund of duty amounting to Rs. 1,68,502/-, contending that duty paid inputs were used in manufacturing finished goods exported after the debonding date. The Assistant Commissioner rejected the claim citing non-compliance with provisions and time limitations. The Commissioner (Appeals) upheld this decision, emphasizing the inability to consider the refund claim under Section 11B of the Central Excise Act for customs duty. The Tribunal concurred, stating that the claim did not qualify for a refund under Section 11B as it pertained to exported finished goods using duty paid packing material, necessitating a claim under Rule 12 of the Central Excise Rules, 1944 and Section 75 of the Customs Act. As M/s. BEC Foods disputed the debonding date, they were advised to claim drawback or rebate, leading to the rejection of their appeal.

Issue 2:
In Appeal No. E/1641/2001-B, M/s. BEC Foods sought a refund of Rs. 2,58,184/-, arguing that no excise duty was payable on finished goods post-debonding date. However, the Assistant Commissioner and Commissioner (Appeals) rejected the claim due to lack of evidence on bearing duty incidence. The Tribunal upheld this decision, noting the absence of proof that duty incidence was not passed on to buyers, invoking the principle of unjust enrichment. Consequently, the appeal was rejected.

Issue 3:
In Appeal No. E/1642/2001-B, M/s. BEC Foods claimed a refund of Rs. 8,76,731/-, asserting that duty was not separately payable on packing material. The Assistant Commissioner and Commissioner (Appeals) denied the refund, citing non-appeal against the debonding order and passing on duty incidence. The Tribunal acknowledged the protest against duty payment and remanded the matter to assess unjust enrichment, emphasizing the need for evidence that duty incidence was solely borne by M/s. BEC Foods.

In conclusion, the Tribunal rejected Appeals 1639 and 1641/2001-B but allowed Appeal 1642/2001-B for further examination on the unjust enrichment aspect.