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Kisan Sahakari Chini Mills Ltd. Versus The Commissioner of Central Excise

2017 (3) TMI 465 - ALLAHABAD HIGH COURT

Refund claim - unjust enrichment - Whether the Tribunal was justified in holding that irrespective of the purpose for which the duty has been granted under N/N. 132/82-CE dated 21.04.1982 in respect of the excess production of sugar during the lean period from May 1982 to September 1982, refund on account of the exemption of notification would be subject to the principle of unjust enrichment? - Held that: - the assessee appellant has passed on the liability of central excise duty to the purc .....

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espondent : Krishna Agarwal, C.S.C. ORDER Heard Sri Shakeel Ahmad, learned Counsel for the appellant and Sri Krishna Agarwal, learned Counsel for the department. This Central Excise Appeal has been filed by the assessee being aggrieved b y the order of the Customs Excise & Service Tax Appellate Tribunal dated 26.09.2012 by which the Tribunal has dismissed the appeal filed by the assessee and confirmed the rejection of claim of refund made by the assessee before the lower authorities. The que .....

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he facts and circumstances of the case, the Tribunal has rightly applied the decision of Apex Court in Sahkari Khand Udyog Vs. CCE reported in 2005 (181) ELT 328 which was for a different notification no.108/78-CE? (iii) Whether upon the facts and circumstances of the case, the Tribunal has committed an error of law while holding that Sub-Section (3), read with Sub-Section (2) of Section 11B introduced w.e.f. 20.09.1991, no refund can be made as rebate in respect of excess production of sugar du .....

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ent?" The period of dispute is 1st of May, 1982 to 30th September, 1982. During that period by virtue of Notification No.132/82-CE dated 21.04.1982 an exemption had been granted on the duty of excise and especially duty of excise leviable on sugar in respect of sugar produced in the factory during the period commencing on 1st day of May, 1982 and ending with 30th day of September, 1982. Admittedly, the assessee manufactured and sold certain quantities of sugar during the period of dispute, .....

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e Tribunal has rejected the claim of the assessee by applying the principle of unjust enrichment by reasoning that the assessee having charged and having thus, passed on the liability of excise duty on the purchaser, it was not entitled to claim refund of such amounts. Amongst others the Tribunal further held in paragraph no.6 of its order, which is quoted hereunder:- "6...............In view of the non-obstante clause of sub-section (3) of Section 11B, all the refund claims made during the .....

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the refund, irrespective of the purpose for which the duty exemption had been granted under notification no.132/82-CE in respect of the excess production of sugar during the lean period from May, 1982 to September, 1982, the refund on account of this exemption notification would be subject to the principles of unjust enrichment. In view of this, the impugned order is not correct. The same is set aside. The Revenue's appeal is allowed." In paragraph no.4 of the affidavit dated 03.03.2017 .....

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led to claim refund of duty that has not been borne by him or has been passed on to the purchaser, we do not find any error in the findings recorded by the Tribunal. In a similar controversy in the case of Sahakari Khand Udyog Mandal Ltd. v. Commissioner of C. EX. & CUS. reported in 2005 (181) E.L.T. 328 (S.C.) the Hon'ble Apex Court has held as under:- "The doctrine of unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of anothe .....

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or cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution." Lord Denning also stated in Nelson v. Larholt, [1947] 2 All E .....

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estitution if the justice of the case so requires." The above principle has been accepted in India. This Court in several cases has applied the doctrine of unjust enrichment. In Orient Paper Mills Ltd. v. State of Orissa, [1962] 1 SCR 549, this Court did not grant refund to a dealer since he had already passed on the burden to the purchaser. It was observed that it was open to the Legislature to make a provision that an amount of illegal tax paid by the persons could be claimed only by them .....

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