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2005 (11) TMI 411 - AT - Central Excise
Issues:
Refund claim under Notification Nos. 36/87-CE and 174/87, unjust enrichment aspect, retrospective application of Section 11B of the Central Excise Act 1944. Analysis: The appeal was filed against the Order-in-original rejecting a refund claim of Rs. 3,64,08,687 made by the appellants under Notification Nos. 36/87-CE and 174/87. The Commissioner (Appeals) initially granted relief, which was upheld by the Tribunal in 1991. The refund amount was paid to the appellant in 1990, and subsequently, a show cause notice was issued for recovery based on unjust enrichment. The main contention was whether the refund granted in 1990 could be recovered based on the unjust enrichment aspect. The appellant's advocate argued that the refund was granted unconditionally and finally in 1990, before the enactment of provisions related to unjust enrichment in 1991. He cited the Supreme Court's decision in Mafatlal Industries Case to support the argument that the unjust enrichment provisions cannot be applied retrospectively to refunds made finally and unconditionally before the enactment. The Tribunal analyzed the Commissioner's findings, emphasizing that unjust enrichment provisions apply retrospectively only to refunds not made finally and unconditionally. Since the refund in this case was granted in 1990 before the enactment of unjust enrichment provisions, it could not be reopened in 1991. The Tribunal concluded that as there was no legislation on unjust enrichment in 1990 when the refund was granted, and the matter had attained finality, there was no basis for the recovery ordered by the Commissioner. In light of the above analysis, the Tribunal set aside the Order-in-original and allowed the appeal with consequential relief. The decision highlighted the importance of the timing of refund grants concerning the application of unjust enrichment provisions and the retrospective nature of Section 11B of the Central Excise Act 1944 as interpreted by the Supreme Court in the Mafatlal Industries Case.
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