2004 (1) TMI 400 - AT - Central Excise

Summary

Issues:
1. Right of purchaser to claim refund of duty paid under protest.
2. Applicability of limitation period for refund claims.
3. Doctrine of unjust enrichment in refund cases.

Issue 1: Right of purchaser to claim refund of duty paid under protest
The appeal challenged the Order-in-Appeal denying the purchaser's right to claim a refund of duty paid under protest. The appellant relied on a Supreme Court judgment in the case of National Winder v. Commissioner of Central Excise, Allahabad, stating that the limitation of six months for refund claims does not apply when duties are paid under protest. The appellant also highlighted that the Proviso to Section 11B of the Central Excise Act covers refund claims by both manufacturers and purchasers. The appellant presented evidence, including a Certificate of Chartered Accountants, to support their claim that the duty paid on printed labels was not passed on to consumers. The appellant limited the refund claim to the period when duty was paid under protest, seeking a refund of Rs. 6,91,565.

Issue 2: Applicability of limitation period for refund claims
The Commissioner of Central Excise submitted comments stating that duty was paid under protest by the manufacturer for a specific period, and the appellants were not entitled to the full refund claimed. However, the Tribunal, considering the Apex Court's judgment in National Winder v. Commissioner of Central Excise, Allahabad, held that the purchaser's refund claim for the period specified was eligible for approval. The Tribunal emphasized the requirement for the appellant's customers to obtain a disclaimer certificate from the manufacturer confirming that the refund claim was not made by the manufacturers themselves.

Issue 3: Doctrine of unjust enrichment in refund cases
Regarding the plea of unjust enrichment, the Tribunal referred to the Apex Court's decision in the case of Sinkhai Synthetics & Chemicals Pvt. Ltd. v. CCE, Aurangabad, which stated that the refund of duty paid under protest is not affected by unjust enrichment. The Tribunal acknowledged differing views on unjust enrichment, with a 3-Member Bench of the Apex Court supporting the application of the doctrine while a 2-Member Bench held otherwise. The Tribunal, however, indicated a preference for the judgment in Sinkhai Synthetics & Chemicals Pvt. Ltd. v. CCE, Aurangabad, over the conflicting view, ultimately allowing the refund claim of Rs. 6,91,565 and partly allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund claim of Rs. 6,91,565 for the specified period when duty was paid under protest. The judgment emphasized the purchaser's right to claim a refund under such circumstances, highlighting the importance of obtaining a disclaimer certificate from the manufacturer. The Tribunal also clarified its stance on the doctrine of unjust enrichment, favoring the application of the principle as per the judgment in Sinkhai Synthetics & Chemicals Pvt. Ltd. v. CCE, Aurangabad.