Commissioner of C. Ex. vs Rocket Engg. Corporation Ltd.

These appeals are directed against the common order dated 18 January 2007 of the Customs Excise and Service Tax Appellate Tribunal, Mumbai (the Tribunal). Since the order of the Tribunal is common in the two appeals, filed by the Commissioner of Central Excise against the same respondent-assessee, we are considering both these appeals together. The revenue has proposed the following common questions in the two appeals as substantial questions of law:-

(a) Whether in the facts and circumstances of the case and in law the CESTAT is justified in rejecting the appeal of the Revenue in view of the refund claim amount being treated as expenditure in the respondent''s Profit and Loss Account, these forming part and parcel of the cost of production, thereby stand recovered from the customers. Therefore, sanctioning of the refund will lead to unjust enrichment.

(b) Whether in the facts, and circumstances of the case and in law the CESTAT is justified in rejecting the appeal of the Revenue in holding that the bar of unjust enrichment will not apply in the present case, when payment of duty is made subsequent to clearance of goods.

(c) Whether in the facts and circumstances of the case and in law the CESTAT is justified in rejecting the appeal of the Revenue in view of the decision of the Apex Court in case of Sahakari Khand Udyog Mandal Ltd. Vs. Commissioner of Central Excise and Customs,

(d) Whether in the facts and circumstances of the case and in law the CESTAT is justified in rejecting the appeal of the Revenue in view of the decision of the Apex Court in case of Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd.,

The issue arising in these appeals is whether the refund of duty deposited during investigation is hit by the doctrine of unjust enrichment. There is no dispute on the assessee-respondent being entitled to refund on merits.

The Deputy Commissioner of Central Excise upheld the respondent''s claim for Rs. 54,339/- and Rs. 39,483/- on the ground of unjust enrichment.

In appeal, the Commissioner of Central Excise (Appeals) held as facts that the respondent-assessee paid Central Excise Duty of Rs. 54,339/- and Rs. 39,483/- on 27 August 2002, that is much after clearance of the excisable goods during the period from 1 September 2001 to 31 July 2002. Therefore, it was held that unjust enrichment will not be applicable and directed refund.

The appeal by the revenue was dismissed by the Tribunal on a finding of fact that amounts of differential duly were paid subsequent to the clearance of the excisable goods on insistence of the Anti Evasion and thus, the burden of duty was not passed on to the customer.

Learned counsel for the appellant/revenue, however, relies upon the decision of the Apex Court in Sahakari Khand Udyog Mandal Ltd. Vs. Commissioner of Central Excise and Customs, and Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd., wherein the Supreme Court laid down that doctrine of ''unjust enrichment'' based on equity is invoked to deny a refund to person unless the person is able to show that he has paid the amount of which refund is sought without having passed on the burden to others.

The aforesaid decisions are distinguishable, as in this case there are concurrent findings of fact by the Commissioner (Appeals) & the Tribunal that the respondent-assessee has paid the Central Excise Duty of Rs. 54,339/- and Rs. 39,483/- after clearance of the excisable goods. Moreover, this payment of duty was on insistence of Anti Evasion Branch of the Central Excise Department. Thus, it was held that the burden of duty was not passed on to its customers.

In view of the above concurrent findings of fact, in our view, no substantial question of law arises from the impugned order of the Tribunal. Accordingly appeals are summarily dismissed. No order as to costs.