2010 (2) TMI 553 - HC - Central Excise

Doctrine of unjust enrichment Appellant failed to prove that he has not passed burden of duty to customers failed to discharge onus not entitled to get refund as that would amount to unjust enrichment.

Summary

Issues involved:
Appellant challenging order denying refund of duty paid on galleries; Application of doctrine of unjust enrichment; Compliance with Section 11B(1) for refund claim.

Analysis:
1. Challenge to Order Denying Refund: M/s. GMP Finishing Mills appealed against the order denying their refund claim for duty paid on galleries, based on the Tribunal's decision that no reliable evidence was presented to show the duty was not passed on to buyers. The appellant contended they were not liable to pay duty on galleries following a Supreme Court judgment. However, the authorities held that the appellant failed to demonstrate that the duty burden was not shifted to buyers, invoking the doctrine of unjust enrichment.

2. Application of Doctrine of Unjust Enrichment: The main issue revolved around the applicability of the doctrine of unjust enrichment in the case. While it was acknowledged that the duty on galleries was not payable by the appellant, the refund claim required proof that the duty burden was not transferred to buyers. The appellant's failure to provide such evidence led to the rejection of the refund claim to prevent unjust enrichment, as per legal provisions.

3. Compliance with Section 11B(1) for Refund Claim: Section 11B(1) mandates that refund applications must be supported by evidence showing payment of duty by the applicant and that the duty burden was not passed on. In this case, the appellant did not meet this requirement by failing to demonstrate that they did not recover the duty from buyers. The absence of proof led to the presumption that the duty was collected from customers, aligning with the legal precedent supporting the invocation of the doctrine of unjust enrichment.

In conclusion, the Court upheld the decision to credit the refund amount to the Consumer Welfare Fund, as the appellant did not discharge the burden of proving that the duty was not passed on to buyers. The appeal was dismissed as it lacked merit due to the appellant's failure to provide documentary evidence to support their claim, ultimately resulting in the rejection of the refund claim based on the doctrine of unjust enrichment.