Home Case Index All Cases Central Excise Central Excise + SC Central Excise - 2015 (4) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 389 - SC - Central ExciseRefund claim - doctrine of unjust enrichment - Capital goods - Captive consumption - Whether the doctrine of unjust enrichment is applicable in respect of raw material imported and consumed in the manufacture of a final product - Held that:- principle of unjust enrichment is applicable even when the goods are used for captive consumption. - if a particular material is used for manufacture of a final product, that has to be treated as the cost of the product. Insofar as cost of production is concerned, it may include capital goods which are a part of fixed cost as well as raw material which are a part of variable cost. Both are the components which come into costing of a particular product. Therefore it cannot be said that the principle laid down by the Court in Solar Pesticides would not extend to capital goods which are used in the manufacture of a product and have gone into the costing of the goods. In order to come out of the applicability of the doctrine of unjust enrichment, it therefor becomes necessary for the assessee to demonstrate that in the costing of the particular product, the cost of capital goods was not taken into consideration. Tribunal has observed that capital goods viz. ESPs have been only used captively for pollution control purpose and the same is not used for processing or manufacturing of any final product and therefore there is no question of passing on the burden of duty to any one. These observations are clearly erroneous in law in view of the judgment of this Court in Indian Farmers Fertilisers COOP. Ltd. - Accordingly, the judgment of the Tribunal is set aside. - Decided in favour of Revenue.
|