2016 (7) TMI 1324 - AT - Central Excise

Refund of duty paid on refined oil - refund denied on the ground of time limitation and unjust enrichment - Held that - Sub-section (2) of Section 11B provides that on receipt of any application, the Assistant Commissioner or the Deputy Commissioner, it is satisfied that the whole or any part of the duty of excise is refundable, then he has to make an order on such refund application. On perusal of the statutory provision, it reveals that nowhere there is no mention that the application has to be returned to the assessee. In this case, initially refund application was filed on 25.02.2005, which is within the limitation period from the date of Hon ble Supreme Court judgment dated 23.11.2004. Thus, refund application is not barred by limitation of time. Unjust enrichment - refund claim - Held that - Since the duty amount had not been charged or claimed in the invoices, it cannot be said that the incidence has been passed on to the buyer of the goods - in the balance sheet as on 31.03.1992, the appellant had shown the disputed duty under the head current assets, loans and advance , showing the narration as Central Excise duty paid under protest. The accounting entry made in the balance sheet proves beyond any shadow of doubt that the incidence of disputed duty had been borne by the assessee and not passed on to any other person. Hence, the doctrine of unjust enrichment is not applicable in the facts and circumstances of the present case. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Limitation period for filing refund claim.
2. Doctrine of unjust enrichment.

Analysis:
1. The case involved appeals by the assessee and the Revenue against an order dated 28.02.2007 regarding a refund claim for Central Excise duty by the appellant, a manufacturer of edible oil. The dispute arose from the classification of the product and the subsequent refund application filed after a favorable judgment by the Supreme Court. The Revenue contended that the refund claim filed on 23.05.2006 was beyond the limitation period under Section 11B of the Central Excise Act, 1944. However, the Tribunal held that the initial application filed on 21.02.2005 was within the limitation period, as Section 11B does not require the application to be returned by the authorities. Citing the case law of United Phosphorus Ltd. Vs UOI, the Tribunal emphasized that once a refund application is filed, the authorities must consider it without returning it to the applicant. Therefore, the appeal of the Revenue on the limitation aspect was dismissed.

2. Regarding the doctrine of unjust enrichment, the assessee argued that the duty had not been passed on to buyers as no duty was charged on invoices during 1984-1986, and the duty was deposited in 1992. The Tribunal referred to the case of Commissioner of Central Excise Chandigarh-I Vs Modi Oil and General Mills, where it was held that duty cannot be transferred to buyers after clearance if paid at a later date. Additionally, the balance sheet of the appellant showed the disputed duty as a current asset, indicating it was borne by the assessee. Therefore, the Tribunal concluded that the doctrine of unjust enrichment did not apply in this case and allowed the appeal in favor of the assessee, setting aside the order rejecting the claim on the ground of unjust enrichment.

In conclusion, the Tribunal dismissed the Revenue's appeal on the limitation aspect and allowed the assessee's appeal on the doctrine of unjust enrichment, thereby disposing of the appeals accordingly.