Order Date – 13 June 2023

Parties: Span Divergent Limited Vs Commissioner of Central Excise & ST, Surat-I

Facts – 

• The Appellant, Span Divergent Limited, had filed a classification list in the year 1993 declaring that the impugned goods namely Tuberculin PPD are classifiable under CETH 30.02 and chargeable to nil rate of central excise duty. But the authorities and classified the product under CETH 3005.90
• The Assistant Commissioner by order dated 03.03.2008 held that product Tuberculin PPD are to be classified under sub heading 30.02, accordingly the appellant filed a refund claim which was paid under protest during the period 2001 to 2008.
• The learned adjudicating authority sanctioned refund claim, however the entire amount was credit to the Consumer Welfare Fund as per the provision of Section 11B(2) of the Central Excise Act, 1944 observing that burden of proof against the bar of unjust enrichment has not been successfully discharged by the appellant.

Issue – 

• Whether the refund of the duty is hit by principles of unjust enrichment or not?

Order – 

• The Tribunal observed that it has been reported that the appellant have shown excise duty in their invoice while clearing the goods from the factory as per ledger in majority cases the invoice value including excise duty has been recovered from the customers.
• This fact clearly shows that duty was paid by the appellant even though under protest has become an integral part of the total sales value and therefore the excise duty so paid by the appellant was collected from their customers.
• It can easily be ascertained that incidence of central excise duty has clearly been passed on to the buyers of the appellant’s product. In view of above facts, the appellant has passed on the burden of the excise duty to their customers and therefore they are hit by provisions of unjust enrichment.
• Thus the principles of unjust enrichment in this case is clearly applicable and the appellant has failed to discharge its burden of proving that burden of duty has not been passed on to the customer. It was held that since incidence of the duty has been passed on to the buyers therefore, the refund is hit by the principles of unjust enrichment.

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