COMMISSIONER OF CENTRAL EXCISE versus M/S. BIRLA CORPORATION LTD. & ANR.

Citation: [2007] 2 S.C.R. 12 · Decided: 25-01-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

A 
COMMISSIONER OF CENTRAL EXCISE 
lo 
MIS. B!RLA CORPORATION LTD. & ANR. 
JANUARY 25, 2007 
B 
[DR. ARlJJT PASA YAT AND S.H. KAPADIA, JJ.] 
Central Excise Act, 1944-S. l I B(2)(e)-Unjust enrichment-Bar of-
Held, applicable to claim for refund where orir,inal payments of duty were 
C made under protest. 
D 
The question which arose for consideration in the present appeal is 
whether CEGAT was justified in holding that the bar of unjust enrichment 
does not apply to claim for refund in cases where original payments of duty 
were made under protest. 
Disposing of the appeal, and remitting the matter to Assistant Collector, 
the Court 
HELD: I.I. Section ll-B(2)(e) of Central Excise Act, 1944 conferred a 
right on the buyer to claim refund in cases where he proved that he had 
E not passed on the duty to any other person. The entire scheme of 
Section 11-B showed the difference between the rights of a manufacturer to 
claim refund and the right of the buyer to claim refund as separate and 
distinct. Moreover, under Section 4 of the said Act, every payment by the 
manufacturer whether under protest or under provisional assessment was on 
his own account. The accounts of the manufacturer are different from the 
F accounts of a buyer (distributor). In view of this, the order of CEGAT cannot 
,.--
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be maintained. [Paras 7 & 81 [17-E-Gj 
1.2. But the crucial question !s whether the duty element had been passed 
on to the customer. This is to be factually adjudicated. [Para 9[ [ 17-Hj 
Commissioner of Central Excise, Mumbai II v. Allied Photographies, 
12004] 4 sec 34, followed. 
Ma.fat/al Industries Ltd. v. UOI, (1997) 89 ELT 247 SC; Sinkhai 
12 
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COMMNR. OF CENTRAL EXCISE r. BJRLA CORPN. LTD (PASA YAT, J] 
13 
Synthetics & Chemicals (P) ltd. v. Collector of Central Excise, A urangabad, A 
12002] 9 SCC 416 and Commissioner of Central Excise, M;anbai v. Allied 
Photog•aphics India Ltd., 12004] 4 SCC 55, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1983-1984 of 
2004. 
From the Final Order Nos. 263-264/2002-C dated 5.12.2002 of the Customs, 
Excise & Gold (Control) Appellate Tribunal, West Block, New Delhi in Appeal 
No. E/2009/01-C & E/1654/01-C. 
Mohan Parasaran, A.S.G., K. Swami, Rekha Pandey and B. Krishna 
B 
Prasad for the Appellant. 
C 
Harish N. Salve, Ashok Sagar and Meera Mathur for the Respondent 
No.2. 
S.K. Bagaria, Praveen Kumar for the Respondent No. l. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASAYAT, J. I. Challenge in these appeals is to the judgment 
D 
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rendered by the Customs, Excise and Gold (Control) Appellate Tribunal, New 
Delhi, (for short 'CEGA T'). By the impugned judgment the CEGAT held that 
the bar of unjust enrichment does not apply to claim for refund in cases where E 
original payments of duty were made under protest. Accordingly, the orders 
passed by the Central Excise Authorities were set aside. 
2. Background facts in a nutshell are as follows:-
3. Respondent no. I was formerly known as M/s. Birla Jute & Industries F 
Ltd. unit Chittor Cement Works. It was engaged in the manufacture of 
Cement which is classifiable under Chapter 25 of the Schedule to the Central 
Excise Tariff Act, 1985 (in short 'Tariff Act'). It claimed the benefit of rebate 
of central excise duty under Notification No.36/87-CE dated 1.3.1987 which 
was denied by the Department. Thereafter, respondent no. I paid duty at the G 
applicable rates under protest during the period between March I 987 to 
March 1990. Initially, the respondent no. I was held to be entitled to the 
benefit of the notification in terms of the order dated 14.5.1991 passed by the 
Collector (Appeals), Central Excise. Respondent no. I by letter dated 29 .5 .1991 
requested the jurisdictional Assistant Collector to grant refund in compliance 
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14 
SUPREME COURT REPORTS 
(2007] 2 S.C.R. 
A of the order passed by the Collector (Appeals). Being aggrieved by the order 
of the Collector (Appeals), Revenue preferred an appeal before the CEGAT 
which was dismissed. Authorities were of the view that respondent no. I had 
passed on duty to the customers and, therefore, notice was issued on 29.4.1994 
to show-cause as to why the amount of refund should not be credited to the 
Consumers Welfare Fund. By order dated 20.12.1994, the Assistant Collector, 
B Central Excise Division, Udaipur, sanctioned the refund claimed but directed 
that only a part of it was to be paid to respondent no. I. The remaining 
amoun
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