Customs, Excise and Gold Tribunal - Tamil Nadu
Karnataka Antibiotics And ... vs C.C.E. on 21 July, 1995
Equivalent citations: 1996(83)ELT114(TRI-CHENNAI)
ORDER S. Kalyanam, Vice President 1. This appeal is directed against the order of the Collector (Appeals), Bangalore, dated 21-1-1992. The appellants herein are manufacturers of pharmaceutical products and filed refund claim on. 19-2-1991 on the ground that they paid excess duty on the product viz. Nufenac tablets and injections manufactured during the period from 19-7-1990 to 23-10-1990. The refund claim was filed on the ground that the goods in question which was initially under Schedule 1 attracting duty of 15% was brought in Schedule 2 attracting of 10% as per the order of the Drug Controller read with Notification 29/88, dated 1-3-1988. The refund claim was rejected on the ground of unjust enrichment in terms of Section 11B of the Central Excises & Salt Act, 1944. 2. Shri Bheemasena Rao, the learned Consultant for the appellants contended that so far as the retail price is concerned, the maximum retail price is fixed by the Drug Controller statutorily and in the present case irrespective of the variation in the duty element whether it is 10% or 15%, the maximum retail price continued to remain the same, and therefore, the question of passing on the incidence of any duty and the appellants enriching themselves at the cost of the consumer would hardly arise in the peculiar facts and circumstances of the case. It was further urged that the fixation of maximum retail price is akin to the system of fixing tariff value for assessment purposes. Therefore, irrespective of the variation in the duty element, the maximum retail price fixed in terms of Notification 245/83, dated 1-3-1983 alone is realisable. 3. Heard Shri D.V. Inderagith, the learned D.R. 4. We have considered the submissions made before us. The scope of the doctrine of unjust enrichment as understood in general law as referred to specifically under amended Section 11B of the Act is that if a person or a manufacturer had passed on the incidence of duty to the consumer, and at a later point of time, the duty paid by the manufacturer was found to be excess, the manufacturer would be deprived of the right to take the refund and thereby unjustly enriching himself at the cost of the consumers or tax payers. In the present case, the duty element is not relevant since retail price has been statutorily fixed by the Drug Control authorities on the goods in question. Therefore, irrespective of the fact whether duty is enhanced or reduced when maximum retail price admittedly continued to remain the same and stagnated as in this case, the question of the appellants passing on the incidence of duty does not arise and consequently there is no scope for the appellants enriching themselves at the cost of the tax payers by passing on the incidence of duty on the consumer and at the same time enriching themselves while getting the refund of the excess duty paid. This is the admitted position not only on the facts of this case and also on the basis of the doctrine of unjust enrichment as understood in general law with particular reference to the same in the amended Section 11B of the CESA, 1944. In this view of the matter, we hold that the impugned order is not sustainable in law and we set aside the impugned order and allow the appeal. V.P. Gulati, Member (T)
5. I observe that this is a case, where statutorily maximum retail price has been fixed in terms of the Notification No. 245/83, dated 1-3-1983. The rate of duty basing on this retail price has been fixed at 10%. The appellants had, however, paid a duty of 15%, the rate prevailing earlier. Appellant, therefore, claimed the refund of excess duty paid by them. The question that arises for consideration is whether the appellants' claim will fall within the purview of proviso to amended Section 11B for the purpose of consideration of unjust enrichment. It is observed that the retail price was fixed statutorily and this price can be taken to have been fixed after taking into consideration the rate of duty of 10% applicable to the goods. The appellants, however, chose to pay a higher rate of duty on the assessable value arrived at based on the statutorily fixed retail price. The excess duty paid, therefore in view of the price fixed by the Government would have come out of the appellants profit element. The element of duty recovered from the consumer by the appellants in view of the price fixed could be only 10%. The excess duty paid in the facts and circumstances of the case cannot be held to have been recovered from the consumer. In view of the above, I agree with the learned Brother that the appellants' refund in any case does not fall within the purview of unjust enrichment.