2013 (11) TMI 1536 - AT - Central Excise

Denial of refund claim - Notification No. 5/94-C.E. dated 1-3-1994 - MODVAT Credit - held that - During the course of investigation the disputed amount was paid by the appellant through PLA although they utilized the amount of credit availed at the time of clearance of goods. As the amount paid through PLA was in dispute before this Tribunal and this Tribunal has held that the said amount was not payable by the appellants and the same has not been challenged by the respondent/Revenue before any other authority. Therefore the order of non-payment of duty by the appellant is a binding force. - appellants are entitled for refund claim. - Decided in favour of assessee.

Summary

Issues:
Appeal against rejection of refund claim on grounds of limitation and unjust enrichment.

Analysis:
The appellants, manufacturers of excisable goods, utilized Modvat credit for payment on final products not attracting additional duty, leading to a show cause notice for recovery of wrong Modvat credit. The Tribunal earlier held the notice as barred by limitation, relieving the appellants from duty payment and penalty. Subsequently, the appellants filed a refund claim of the disputed amount, rejected on grounds of unjust enrichment and limitation by the adjudicating authority and Commissioner (Appeals). The appellant argued that payment during investigation does not lead to unjust enrichment, citing Opel Alloys Pvt. Ltd. v. CCE, Ghaziabad. The respondent contended that utilizing credit on finished goods invokes unjust enrichment, referring to Sahakari Khand Udyog Mandal Ltd. v. CCE & Cus. and CCE, Mumbai-II v. Allied Photographics India Ltd.

The Tribunal found that the disputed amount was paid through PLA during investigation, and as the Tribunal had earlier ruled that the amount was not payable by the appellants, the order of non-payment of duty was binding. The Tribunal distinguished the case from Sahakari Khand Udyog Mandal Ltd. and Allied Photographics India Ltd., stating that unjust enrichment does not apply to refund claims post finalization of assessment. Referring to Opel Alloys Pvt. Ltd., the Tribunal held that amount deposited during investigation, later confirmed as not payable, warrants a refund without unjust enrichment implications. The Tribunal also noted that the refund claim filed within 90 days of the Tribunal's decision was within the time limit, setting aside the impugned order and allowing the appeal with consequential relief.

The adjudicating authority was directed to implement the order within 90 days of receipt.