ORDER
P.S. Bajaj, Member (J)
1. In this appeal which has been filed by the appellants against the impugned order-in-appeal, allowing the refund claim of the appellants, but directing its deposit in the Consumer Welfare Fund in terms of Section 11B(2) of the Act, the issue relates to the applicability of principle of unjust enrichment. By applying this principle, the authorities below have directed the deposit of refund claim of the appellants of Rs. 4,59,974/- to the Consumer Welfare Fund.
2. The learned Counsel has contended that since the clearances were made before the issuance of Notification No. 161/90, dated 15-12-90 enhancing duty on MMF yarn from Rs. 50/- per Kg. to Rs. 63/- per Kg. per yarn, and on nylon filament yarn and polyester filament yarn from Rs. 55/- per kg. to Rs. 70/-per kg., the question of passing of incidence of duty to the ultimate customers and the applicability of principle of unjust enrichment did not arise. Therefore, the impugned order deserves to be struck down. On the other hand, the learned SDR has reiterated the correctness of the impugned order.
3. We have heard both the sides and gone through the record. The perusal of the record shows that the appellants paid the duty on 15-12-90 on the nylon filament yarn and polyester filament yarn as per the rate prescribed under Notification 47/90-C.E., dated 20-3-90. But the duty was enhanced vide Notification 161/90-C.E. referred above. The differential duty was deposited by the appellants by debiting in the PLA vide entry No. 415 dated 21-12-90. But the mere clearances of the goods before the issuance of Notification 161/90 enhancing the rate of duty on the yarns referred above, could not lead to an irresistible conclusion that the incidence of duty was not passed on by the appellants to their customers. The gate passes and invoices were still in the hands of the customers when the differential duty was debited by the appellants on a demand made by the Department. No evidence has been adduced by them to prove that they never called upon their customers to pay them the duty at the enhanced rate. They had only submitted photocopy of the invoices and gate passes from which it could not be inferred that there had been no passing of the incidence of duty to the customers by the appellants. They have also submitted one undated certificate from the Chartered Accountant to the effect that they had not received any consideration in respect of sale on the invoices in dispute from the buyers. But no legal value can be attached to such a certificate. Moreover, in that certificate, CA has only referred to the GP Nos. 8339 to 8360 dated 15-12-90 regarding which the additional consideration has not been received by the appellants. He has not referred to other invoices and gate passes. Similarly Shri A.P. Gupta, Manager (Excise) of the appellants in his affidavit has nowhere categorically stated averred the non-passing of the incidence of duty by the appellants to the customers. Rather he has stated in that affidavit which is dated 10-6-2003, that of the gate passes No. 8361 to 8377 (which do not find mention in the certificate of the CA referred above), the goods were sold by the Branch Depot on 15-12-90 at cum-duty paid price based on market condition as per the trade practice of the company (appellant) and the sale price was not affected by the amount of excise duty. The appellants had not filed copies of party-wise general ledgers and other records to prove the non-passing of the duty element to the customers.
4. It is well settled that for claiming the refund of duty, every assessee has to pass through the acid test prescribed under Section 11B of the Act. In other words, it has to be proved by an assessee before claiming the refund of the duty that he had not passed on the burden of duty to the customers. The principle of unjust enrichment is based on equity and fair play. Nobody can be allowed to enrich himself by making gains from both the ends i.e. from the Government as well as from the customers. The appellants has miserably failed to cross the hurdle provided by Section 11B of the Act. We cannot loose sight of the fact that no manufacturer will sell the goods at a loss. He may reduce his margin of profit to compete in the market in the case of enhancement of duty, but still he will not sell the goods at loss. The price of the goods is determined by the manufacturer by taking into account the cost of production, raw material, taxes and duty. Therefore, the plea of the appellants that the clearances of the goods were made by them before the differential duty was paid by them, is not of any help to them for claiming the refund of duty amount without satisfying the requirement prescribed by Section 11B of the Act. Having failed to do so, their refund amount had been rightly ordered to be credited to the Consumer Welfare Fund.
5. The ratio of law laid down in Silwester Textiles P. Ltd. v. Commissioner of Central Excise, Mumbai – 2003 (156) E.L.T. 216 cited by the Counsel is not attracted to the facts of the case. In that case extra duty with interest was paid subsequently and for that reason, the principle of unjust enrichment was not involved. But in the instant case, this principle is applicable to the case of the appellants. Similarly, the law laid down in Thandava Co-op. Sugars Ltd. v. CCE, Hyderabad – 2002 (145) E.L.T. 725 wherein refund of duty paid posterior to the clearances of goods during pendency of appeal under threat of recovery, was held to be not hit by the principle of unjust enrichment, is of no avail to the appellants, as such is not the position in the case in hand.
6. In Union of India v. Jain Spinners Ltd., 1992 (61) E.L.T. 321, the Apex Court has ruled that amendment made to Section 11B of the Act, is retrospective in operation and applicable to all earlier orders and directions for refund given by any authority or court. The refund of duty amount deposited in the Court, instead of with the Department was held to be governed by Section 11B of the Act, by the Apex Court.
7. In Punjab Beverages (P) Ltd. v. CCE, Chandigarh, 2000 (118) E.L.T. 506, the principle of unjust enrichment was not applied as the duty was paid by making debit entries in the PLA on six different dates after clearances with intimation to the Department, but in the case in hand, the invoices and gate passes were issued by the appellants and the goods were sold by the depot at cum-duty price based on market conditions, as is evident from the affidavit of Excise Manager of the appellants referred above. In that affidavit, he has nowhere stated that duty at old rate on the goods (yarns) and not on enhanced rate was charged from the customers. Therefore, the principle of unjust enrichment has been rightly involved in the case of the appellants.
8. In the light of the discussion made above, we do not find any illegality in the impugned order and the same is upheld. The appeal of the appellants is dismissed.