2009 (5) TMI 754 - AT - Central Excise

Summary

Issues:
Adjustment of excess payment against short payment in provisional assessments; Application of unjust enrichment concept in provisional assessments; Refund of excess amount to the assessee or credit to the Consumer Welfare Fund.

Analysis:
1. Adjustment of Excess Payment Against Short Payment in Provisional Assessments:
The case involved the issue of whether excess payment can be adjusted against short payment in provisional assessments. The Tribunal referred to Rule 9B(5) of the Central Excise Rules, which clearly allows for such adjustment. The Tribunal held that the provision explicitly states that when duty is finally assessed, the duty provisionally assessed can be adjusted accordingly. The Tribunal emphasized that the rule provides for the adjustment of excess or short payment, depending on the final assessment. Consequently, the Tribunal found no legal infirmity in allowing the adjustment of excess payment against short payment. The appeal by the Revenue challenging this adjustment was rejected.

2. Application of Unjust Enrichment Concept in Provisional Assessments:
The Commissioner (Appeals) had directed the credit of the balance excess amount to the Consumer Welfare Fund, citing the concept of unjust enrichment. The assessees contended that as per Rule 9B(5), the concept of unjust enrichment should not apply in the case of provisional assessments. However, the Tribunal upheld the Commissioner's decision, stating that the concept of unjust enrichment was indeed attracted. The Tribunal rejected the prayer for refund of the excess amount to the assessees, as they did not challenge the direction to credit the amount to the Consumer Welfare Fund. This decision was based on the application of the unjust enrichment principle in the context of the specific case.

3. Refund of Excess Amount to the Assessee or Credit to the Consumer Welfare Fund:
The Tribunal addressed the issue of whether the excess amount should be refunded to the assessee or credited to the Consumer Welfare Fund. The assessees sought a refund of the excess amount, arguing that the unjust enrichment principle did not apply in this scenario. However, the Tribunal rejected this request, citing the absence of a challenge by the assessees to the direction of crediting the adjusted amount to the Consumer Welfare Fund. The decision was based on the lack of opposition from the assessees regarding the Commissioner's directive.

In conclusion, the Tribunal upheld the adjustment of excess payment against short payment in provisional assessments as per Rule 9B(5) and applied the concept of unjust enrichment to direct the credit of the excess amount to the Consumer Welfare Fund. The appeal by the Revenue was rejected, and the prayer for refund to the assessees was denied due to the absence of a challenge to the Commissioner's direction.