2015 (11) TMI 1672 - AT - Central Excise

Refund claim - unjust enrichment - rejection on the ground that the claimant had already charged and collected the duty amount from its customers and as such, it was not entitled to claim the said amount and accordingly the amount refundable was transferred to Consumer Welfare Fund - Held that - there being no transfer and an admitted destruction of the goods in question the doctrine of unjust enrichment is not attracted - the appellant is entitled to refund - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refund claim based on unjust enrichment doctrine.

Analysis:
The Appellant, a pharmaceutical company, imported medicines and faced issues related to duty payment and subsequent refund claim. The Appellant imported goods detained by DGCEI officers, leading to duty deposit under protest. Show-cause notices were issued and adjudicated, resulting in confiscation, fines, and penalties. Appeals were filed and eventually succeeded, leading to a refund claim for the deposited duty. The central issue revolved around whether the refund claim was subject to the doctrine of unjust enrichment, given the destruction of the goods due to expiry and no transfer of title taking place.

The Tribunal considered the timeline of events, noting that the duty amount was deposited before the show-cause notice was issued. It was established that the goods were not transferred or consumed by the Appellant. Reference was made to a Supreme Court ruling emphasizing the doctrine of unjust enrichment, where the claimant had already charged and collected duty from customers. The Court held that the doctrine is based on equity and can be invoked to deny undue benefits. However, in the present case, with no transfer and confirmed destruction of the goods, the Tribunal concluded that the doctrine of unjust enrichment did not apply. Consequently, the impugned order was set aside, and the Appellant was deemed entitled to the refund. The adjudicating authority was directed to disburse the refund amount within a specified timeframe, along with applicable interest.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the Appellant and emphasizing the absence of unjust enrichment in the circumstances of the case. The decision provided clarity on the application of the doctrine in situations where goods were destroyed, and no transfer of ownership occurred, ensuring a just outcome for the Appellant in the refund claim dispute.