2005 (2) TMI 739 - AT - Central Excise

Summary

Issues:
- Appeal against rejection of refund claim based on unjust enrichment.

Analysis:
The appellants filed an appeal against the rejection of their refund claim by the Commissioner (Appeals) on the grounds of unjust enrichment. The refund claim was related to duty paid under protest on the clearance of waste packages/containers containing inputs. The appellants based their claim on a judgment of the Hon'ble Supreme Court in a specific case. The Adjudicating Authority initially allowed the refund but directed it to be credited to the Consumer Welfare Fund due to the appellants' failure to prove that the duty burden had not been passed on to their customers.

The main contention of the appellants was that they did not charge duty from their customers, supported by certificates from customers indicating non-payment of duty. However, the Revenue pointed to invoices where the duty element was separately mentioned, without clear evidence that this duty element was not recovered from customers. Additionally, the Revenue cited a relevant decision by the Supreme Court in another case.

The central issue in this case was whether the duty burden had been shifted to the customers. The burden of proof rested on the appellants to demonstrate that the duty incidence had not been transferred to their customers. The Adjudicating Authority, after examining the appellants' accounts, found that duty had indeed been recovered from customers. Referring to the Supreme Court decision cited by the Revenue, it was established that principles of unjust enrichment apply even when duty is paid under protest, and the burden of proof lies with the assessee to show that customers were not burdened with the duty. In this instance, the appellants failed to discharge this burden, leading to the dismissal of their appeal.

In conclusion, the appellate tribunal found no merit in the appeal and dismissed it based on the failure to prove that the duty burden had not been passed on to customers.