Case Law Details
Brief Facts of the Case
The assessee herein purchased Electro Static Precipitators (ESPs for short) from M/s. BHEL, Ranipet. In terms of Notification No.78/1990-CE dated 20.3.1990, the assessee was entitled to buy the said ESPs at concessional rate of duty which was 5% ad valorem in contra distinction to the normal rate of 15% ad valorem duty. This concession rate becomes payable on the condition that an officer not below the rank of Deputy Secretary in the Ministry of Environment and Forests (MoEF) certifies that the goods manufactured are meant for pollution control purpose. The dispute arose as to whether the assessee was entitled for concessional rate of duty or not. It paid the duty at normal rate and fought for refund of the extra duty paid on the ground that only concessional rate of duty at 5% could have been charged. The Revenue refused to release this refund and rejected the application of the assessee in this behalf on the ground that the assessee had passed on the burden and therefore refunding the extra duty paid would result in unjust enrichment to the assessee. Against that order the assessee filed the appeal before the Commissioner of Central Excise (Appeal) Chennai, who also dismissed the said appeal. Challenging that order the assessee filed further appeal before the CESTAT. In this appeal the assessee has succeeded and the CESTAT has allowed the appeal and set aside the order of the Commissioner (Appeal) thereby directing the refund of the additional duty paid by the assessee.
Held By Hon’ble Supreme Court of India
The Hon’ble Supreme Court states that on perusal of the order of the CESTAT, it was revealed that the CESTAT was grapping with the question as to whether the doctrine of unjust enrichment will be applicable in case of refund of duty paid on capital goods, which are used captively. The CESTAT has taken note of certain judgments including judgment of this Court in case of Union of India vs. Solar Pesticides Pvt. Ltd. (2000 (2) SCC 705 which was relied upon by the Revenue. However, the said judgment is distinguished as not applicable in the instant case on the ground that this Court in the said case was not concerned with the issue of unjust enrichment in connection with capital goods used captively.
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