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2016 (6) TMI 825 - AT - Central ExciseRefund of duty - unjust enrichment - 100% EOU - Exemption from payment of duty on procurement of goods used for R&D purpose - The department entertained the view that R&D was not part of manufacturing activity and that the benefit of exemption from payment of duty cannot be extended to inputs used for R&D purpose. - Held that:- Department has not adduced any evidence to establish that appellant showed the duty element in the invoices. It is their case that as the appellants showed the amount as expenditure in the Profit & Loss account, the amount is factored in working out the sale price and so the duty has been passed on indirectly. I am not convinced with these arguments. When the appellants are not liable to pay duty, the amount paid does not have the colour of duty at all. Therefore, the doctrine of unjust enrichment is not applicable to the said amount. The duty was paid by appellant much later after starting of investigations. So it cannot be said that the incidence of duty has been passed on to buyers. When the Department argues that the incidence of duty has been passed on, not directly, but indirectly, then it is for the Department to establish the details of such passing of incidence of duty. It cannot be based on assumptions that incidence of duty is passed on. The refund is not hit by the doctrine of unjust enrichment. - Decided in favor of assessee.
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