2016 (10) TMI 1080 - AT - Central Excise

Refund of CENVAT credit - denial on the ground of unjust enrichment - Held that - on plain reading of Sec. 11B 2(c) it is crystal clear that principle of unjust enrichment is not applicable for Cenvat credit refunds - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against rejection of refund claims based on unjust enrichment principle.

Analysis:
The appeal was filed by the Revenue against the rejection of refund claims totaling &8377; 27,50,091/- by the Adjudicating Authority. The claims were related to Cenvat credit amount reversed under the DFIA Scheme. The Commissioner (Appeals) allowed the respondent's appeal, leading to the Revenue's current appeal. The Revenue contended that the appeal was wrongly allowed on the ground of unjust enrichment.

The main contention in the appeal was whether the refund of Cenvat credit could be granted without proving the absence of unjust enrichment. The relevant provision of Sec. 11B, 2(c) was crucial in this regard. The section specifies the conditions for refund of duty and interest, emphasizing that the incidence of duty should not have been passed on to another person for the refund to be granted. However, a plain reading of Clause (c) to the proviso highlighted that the principle of unjust enrichment does not apply to Cenvat credit refunds.

The Tribunal, after considering the provisions, concluded that the principle of unjust enrichment was not applicable for Cenvat credit refunds. Therefore, the Revenue's appeal lacked merit and was dismissed. The judgment clarified the specific application of the law in this context and provided a clear interpretation of the relevant provisions governing the refund claims under consideration.