2009 (9) TMI 771 - AT - Central Excise

Summary

Issues involved:
Manufacturers availing concessional rate of duty under Notification No. 268/82-C.E., rescinding of notifications, challenge on ground of promissory estoppel, incorporation of principle of unjust enrichment under Section 11B of the Central Excise Act, rejection of refund claims on ground of unjust enrichment, appeal challenging rejection of refund claims.

Summary:

The assessees, manufacturers of tyres and tubes, were availing concessional rate of duty under Notification No. 268/82-C.E. which was later rescinded and continued through subsequent notifications. The exemption granted under these notifications was challenged on the ground of promissory estoppel, leading to legal proceedings. Meanwhile, the principle of unjust enrichment was incorporated under Section 11B of the Central Excise Act, and the assessees' refund claims were rejected on this ground. The Commissioner (Appeals) allowed the assessees' appeal, stating that the doctrine of unjust enrichment was not relevant in their case. The Revenue appealed this decision before the Tribunal.

In the Tribunal's final order, the appeal of the Revenue was allowed by way of remand, emphasizing the need to examine the question of unjust enrichment in refund claims under Section 11B. The lower appellate authority failed to provide a clear finding on unjust enrichment as directed, instead accepting the assessees' argument that they were not required to file a refund application under Section 11B. The Tribunal set aside the lower appellate authority's decision and remitted the case for a fresh determination on whether the assessees had unjustly enriched themselves, emphasizing the burden of proof on the assessees.

Ultimately, the appeal was allowed by way of remand, with the case being sent back for a clear finding on unjust enrichment.

*(Operative portion of the order was pronounced in open court on completion of the hearing)*