2004 (10) TMI 501 - AT - Central Excise

Summary

Issues involved:
Whether the bar of unjust enrichment is applicable to the refund of Central Excise duty claimed by M/s. Delton Cables Ltd.

Analysis:
The appeal filed by M/s. Delton Cables Ltd. revolves around the application of the bar of unjust enrichment to their claim for the refund of Central Excise duty. The appellant, represented by Shri S.C. Kamra, argued that they inadvertently included the cost of transportation in the transaction value while paying excise duty, leading to an excess payment of Rs. 12,61,064. They sought a refund, which was initially rejected by the Deputy Commissioner and later by the Commissioner (Appeals) on the grounds that the duty incidence had not been borne by the appellant as they did not separately show the cost of transportation in the invoice, as required by Rule 5 of the Central Excise Valuation Rules, 2000. The appellant contended that the doctrine of unjust enrichment should not apply in their case as the rate awarded by the Department of Telecommunication was inclusive of all elements, including duties and freight, and they did not recover the excise duty portion on the freight element from their customers. The appellant also cited relevant precedents to support their argument.

In response, Shri S.M. Tata, representing the Department, argued that the duty incidence had indeed been passed on to the customers as the price in the invoice was composite and did not separately show the duty element. He emphasized that the burden of proof lies with the party claiming the refund to demonstrate that the duty incidence was not passed on, which the appellant failed to do in this case.

Upon considering both arguments, the Tribunal found that the appellant had not provided sufficient evidence to prove that they bore the duty incidence and that it was not passed on to the customers. The Tribunal noted that the invoice mentioned the entire duty paid by the appellant, but no concrete evidence was presented to support the claim that the duty burden was solely theirs. As per Section 11B(1) of the Central Excise Act, the burden of proof rested on the appellant, and in the absence of compelling evidence, the Tribunal held that the bar of unjust enrichment applied, leading to the rejection of the refund claim.

In conclusion, the Tribunal dismissed the appeal by M/s. Delton Cables Ltd., upholding the decision that the bar of unjust enrichment was applicable in this case, as the appellant failed to substantiate that they bore the duty incidence and did not pass it on to their customers.