2003 (3) TMI 639 - AT - Central Excise

Summary

Issues Involved:
1. Refund of Rs. 88,26,360/- granted by the Commissioner (Appeals) and its challenge by the Revenue on the grounds of unjust enrichment.
2. Rejection of refund of Rs. 16,19,602/- by the Commissioner (Appeals) due to lack of duty paid documents and its challenge by the assessee.
3. Two days delay in filing the cross appeal by the assessee.

Detailed Analysis:

1. Refund of Rs. 88,26,360/- and Unjust Enrichment:

The Revenue appealed against the refund of Rs. 88,26,360/- granted by the Commissioner (Appeals), arguing that it was hit by unjust enrichment. The Commissioner (Appeals) noted that the duty was paid under protest and was not passed on to the consumers, thus not hit by unjust enrichment. The Commissioner's findings were based on the Supreme Court's judgment in Civil Appeal No. 1787 of 1998, which confirmed that duty should be paid under Section 3(1) of the CESA, 1944, not the proviso. The Commissioner (Appeals) also referenced the Supreme Court's ruling in Mafatlal Industries Ltd., stating that the six-month limitation for refund claims does not apply when duty is paid under protest.

2. Rejection of Refund of Rs. 16,19,602/-:

The Commissioner (Appeals) rejected the refund claim of Rs. 16,19,602/- due to the assessee's failure to produce duty paid documents. The assessee challenged this rejection, arguing that the duty was not passed on to the customers and that they had provided sufficient documentation to support their claim. The Tribunal noted that the Commissioner (Appeals) did not adequately consider the documents provided by the assessee and remanded this issue for re-examination.

3. Delay in Filing Cross Appeal:

The assessee's cross appeal was filed two days late. The Tribunal accepted the explanation provided for the delay and allowed the application for condonation of delay (COD).

Separate Judgments:

Majority Judgment:

The majority, including Member (J) and Member (T), held that the refund of Rs. 88,26,360/- is justified and not hit by unjust enrichment, as the duty was paid under protest and not passed on to the consumers. They also remanded the issue of Rs. 16,19,602/- to the Commissioner (Appeals) for re-examination, directing the Commissioner to verify the records and pass a fresh order.

Dissenting Judgment:

Member (T) disagreed, arguing that the refund should be denied due to unjust enrichment, as the invoices indicated that the duty was passed on to the buyers. He emphasized that the burden of proof was on the assessee to show that the duty was not passed on, which they failed to do. He also rejected the cross appeal of the assessee.

Third Member's Decision:

The third Member (T) agreed with the majority, stating that the refund claim arises from the finalization of provisional assessment and is not covered by the provisions relating to unjust enrichment. The third Member also agreed to remand the issue of Rs. 16,19,602/- for re-examination by the Commissioner (Appeals).

Final Order:

In terms of the majority order, the Revenue's appeal was rejected, and the cross appeal filed by the assessee was remanded to the Commissioner (Appeals) for due verification of records and passing a fresh order.