2008 (11) TMI 505 - AT - Central Excise

Refund of unutilized deemed credit - Unjust enrichment - Held that - the appellants are eligible for deemed credit and they are also eligible for refund. However, the doctrine of unjust enrichment is not applicable in respect of exports and Section 11B of Central Excise Act specifically provides that credit on duty paid can be given as cash refund if admissible and principle of unjust enrichment is not applicable - appeal allowed.

Summary

Issues:
1. Deemed credit for independent textile processors on duty paid yarn and fibers.
2. Refund claim rejection on the grounds of being time-barred and unjust enrichment.
3. Applicability of doctrine of unjust enrichment in refund cases.
4. Eligibility for cash refund for exported goods.

Analysis:

The case involved an independent textile processor who had taken deemed credit on processed fabrics exported under bond but later filed a refund claim for unutilized deemed credit. The refund claim was rejected on the basis of being time-barred and unjust enrichment. The appellant argued that the doctrine of unjust enrichment should not apply to refund of duty paid on excisable goods used in accordance with the rules. The Tribunal had previously allowed the appeals, stating that the appellant was entitled to cash refund. The appellant contended that all goods had been exported, making them eligible for the refund.

The Tribunal acknowledged that the appellants were eligible for deemed credit and refund. It was emphasized that the doctrine of unjust enrichment does not apply to exports, and Section 11B of the Central Excise Act allows credit on duty paid to be given as cash refund if admissible. Therefore, the appellant was deemed eligible for the refund claimed, along with interest from a specified date.

Ultimately, the appeal was allowed, granting consequential relief to the appellant. The judgment clarified the applicability of the doctrine of unjust enrichment in refund cases involving duty paid on excisable goods used in accordance with regulations, particularly in the context of exports.