Full Judgment
2. After hearing both sides and considering the material on record it is found that:- (a) The Commissioner (Appeals) has found as regards unjust enrichment "I have examined the matter carefully. The issue before me is to decide whether the Central Excise duty paid by the appellant is hit by virtue of unjust enrichment or otherwise. It is observed that the appellants have paid, the duty demanded for the period 1.4.95 to 31.3.2000, during Sept. 1999 to March, 2000. In other words duty was paid after the clearance of the cosmetic. This shows that part of the goods wee already cleared before the payment of duty and therefore there is no question of passing of this excess paid duty on the customers in respect of these goods. It is also an accepted fact that the prices of the cosmetics viz. after shave lotion remained unchanged for the period 1995 to 2000. It is presumed by the adjudicating authority that lowering of State Excise duty from 100% to 50% in 1998-99 might have been adjusted against Excise duty paid. However such assumption and presumption cannot be considered as grounds for rejecting the refund claim. The said presumption is based on ground that since no separate head of account is shown in their balance Sheet, the differential duty might have been recovered though the remaining items. What is relevant is to be examined is whether the appellant charged the excise duty paid by them from their customers and reflected the same in their commercial or excise invoices. No such evidence is adduced. The appellant say that they have not charged the excise duty paid by them from their customers as evident from their invoices. In view of this, it has to be necessarily held that the appellant have no passed out the excise duty paid by them. In case of Corona Cosmetics and Chemicals {2000 (118) E.L.T. 356 (Trib.)}, Tribunal held that when a composite sale price is shown in the invoices and duty not indicated separately, it is sufficient to show that incidence of duty has not been passed on to the customers. The Tribunal in the above order has observed as under: "In this case, the issue is whether the respondents have discharged burden that incidence of duty has not been passed on to the customers. The contention of the respondents is that the invoices were showing the composite price of the goods and the price of the goods remained the same during the period in question and prior to that. The Tribunal in the case of C.C.E. v. Metro Tyres Ltd. (supra=1995 (80) ELT-410-Tribunal) on similar facts, held that the assessees' invoices during the material period showing the composite price and duty not indicated separately, itself is sufficient to show that incidence of duty has not been passed on to the customers. This view was followed by the Tribunal in another case i.e. C.C.E. v. Metro Tyres Ltd. reported in 1996 (82) ELT-95 and the appeal filed by the revenue against this decision, was dismissed by the Hon'ble Supreme Court reported in 1997 (94) ELT-A51. In view of the settled position of law, as discussed above, I find no infirmity of this, the refund claim of the appellants is not hit by bar of unjust enrichment." The decision in the case of Metro Tyres Ltd. - 1995 (80) E.L.T. 410 and Corona Cosmetics and Chemicals - 2000 (118) E.L.T. 356 as applied by the learned Commissioner will not assist to come to a finding that the refund in this case is not hit by the theory of unjust enrichment. There is no doubt that duty has been demanded and paid on captive consumption of the goods and on captive consumption the Supreme Court has upheld the application of unjust enrichment in the case of Solar Plasticides case. Therefore, whether the price of the final product which is not excisable remain the same or would not be material facts to determine that no unjust enrichment bar does not apply in this case.
(b) The plea being made before us that there is no evidence to prove that the respondent charged excise duty paid by them from customers or that no such evidence was reflected in their invoice will not be relevant to determine unjust enrichment, we find force in the grounds taken in appeal as under:- "The Order-in-Appeal KKS (112)112/VI/2001 dt. 27.7.2001 passed by Commissioner (Appeals) against the Order-in-Original passed by Additional Commissioner Central Excise, confirming the duty demand on the manufacture of denatured alcohol was reviewed by the department and a appeal has been filed before CEGAT on 11.12.2001.
Therefore, the matter is subjudise before Hon'ble CEGAT. Further, while passing the order No. 18-42/2001, Dy. Commissioner, Thane-II Dn. Has that the price list (approved by state Excise authorities) indicate that the prices remained practically constant from 1995 to 2000 for 50 ml and 75 ml pack sizes for after shave lotion and cologne. During the State Budget for 1998-99 the State Excise Duty was reduced from 100% to 50% adv. However, the benefit was not passed on to the customers as is evident from the fact that the prices remained unchanged right from 1995. It is very clear that the component of Central Excise Duty payable on Denatured Alcohol was thus, indirectly recovered from the customer. This obviously includes the Central Excise Duty. Hence, the case is hit by the doctrine of unjust enrichment.
Also it was observed that the balance sheets submitted by the assessee do not indicate the specific heads for the items viz. After Shave Lotion and Colognes and the amounts accrued thereon. The assessee manufactured various other items such as Park Avenue talk, shaving cream tone hair dye and shampoo etc. including after shave lotion and cologne, but has not submitted price fluctuation trend for all of them. It is not evident from records submitted that differential duty charged was not recovered through the remaining items excluding after shave and cologne. Hence it cannot be conclusively said that the differential duty would not have been offset by the remaining items.
Benefit of Sales Tax reduction should have been passed on to the customer. Non performance of doing so implies a strong possibility of adjustment of burden of payment of Central Excise Duty paid by the assessee under protest. Therefore, refund claim is rightly hit by the principle of "Unjust enrichment" as is held by the Dy.
Commissioner in the Order-in-Original." (c) The respondent-assessee have submitted that the amounts were paid under protest. It is found that there is no finding arrived at on this aspect and its consequences on the bar of unjust enrichment.
This aspect needs to be reexamined by the lower authorities especially now tat the Apex Court decision in the case of Hindustan Metal Pressing Works - 2003 (108) E.C.R. 25 (S.C.) is available wherein in para 9 the apex court stipulates- "9. Relying upon the aforesaid judgments, in a similar matter, the court Shikhai Synthetics & Chemicals (P) Ltd. (2002) 95CC 416 allowed the appeal and rejected the contention of the Revenue that the Revenue that the excise duty paid under protest would be covered by the provisions of Section 11B".
3. Therefore, once we find that the order of the Commissioner Appeals) cannot be upheld on the grounds as arrived by him the same is set aside. After setting aside the order the appeal is required to be allowed as remand to the original authority to re-determined the issue of bar of unjust enrichment in view of the law as laid down by the Apex Court in the case of Hindustan Metal Pressing and on the facts of duty payments under protest.