2004 (2) TMI 518 - AT - Central Excise

Summary

Issues:
1. Claim for refund of duty paid under protest.
2. Classification of metallised/lacquered plastic films.
3. Application of the principle of unjust enrichment in refund claims.

Analysis:
1. The appeal pertains to the claim for refund of duty paid under protest by the assessee. The appellant purchased duty paid plastic films, metallised and/or lacquered them. Initially, these films were exempt from excise duty under a specific notification. However, after the introduction of the Central Excise and Tariff Act, 1985, there was ambiguity regarding the dutiability of the metallised/lacquered films, leading to a halt in their clearance from 1-3-1986. The appellant filed a classification list claiming no duty was payable as the process did not amount to manufacture. Clearance resumed under protest. The Assistant Collector approved the classification list, stating no duty was payable as input and output were classifiable under the same sub-heading.

2. Subsequently, the appellant claimed no duty was payable based on the earlier order. However, after clearance without payment of duty, the department insisted on duty payment. A show cause notice was issued proposing duty demand, leading to a series of appeals and orders. The Tribunal, in a previous order, held that the process did not amount to manufacture. The appellant then filed a refund claim for a specific period.

3. The issue of unjust enrichment arose concerning the refund claim. The appellant contended that since duty was paid under protest, the principle of unjust enrichment should not apply. They cited relevant Supreme Court decisions and Tribunal judgments in support. The Revenue argued against the refund claim based on the principle of unjust enrichment, referring to specific Supreme Court decisions. The Tribunal considered various legal precedents, including Sinkhai Synthetics & Chemicals Pvt. Ltd., which held that when duty is paid under protest, the principle of unjust enrichment does not apply. The Tribunal, following this precedent, allowed the appeal, setting aside the order and ruling in favor of the appellant's entitlement to the refund without considering unjust enrichment.

This detailed analysis of the judgment covers the issues of the claim for refund of duty paid under protest, the classification of metallised/lacquered plastic films, and the application of the principle of unjust enrichment in refund claims, providing a comprehensive understanding of the legal proceedings and decisions involved in the case.