2017 (3) TMI 1596 - AT - Central Excise

Refund claim - finalization of provisional assessment - unjust enrichment - Held that - appellant was before the Apex Court on same issue as per the decision 2003 (8) TMI 42 - SUPREME COURT OF INDIA , where it was held that delay of the Department to finalize provisional assessment shall not drag the appellant to undergo the test of unjust enrichment - the delay in finalization of provisional assessment has dragged the appellant to litigation and in absence of bar of unjust enrichment in Rule 9B(5) of CER, 44, prior to 25-6-1999, appellant need not undergo such test - appeal allowed.

Summary

Issues:
1. Finalization of provisional assessment for the years 1996-97, 1997-98, and 1998-99 leading to a refund.
2. Error in quantifying development expenses during final assessment.
3. Refund claim filed and amount credited to Consumer Welfare Fund.
4. Application of the doctrine of unjust enrichment in the case.
5. The impact of delay in finalization of provisional assessment on the refund entitlement.

Analysis:

1. The appellant's grievance was regarding the provisional assessment for the years 1996-97, 1997-98, and 1998-99, which was finalized on 29-3-2005, resulting in a refund of &8377; 3,84,17,573/- paid in excess of the duty ultimately payable.

2. An error in quantifying development expenses during final assessment led to a refund of &8377; 1,21,65,103/-, with a portion credited to the Consumer Welfare Fund, prompting the appellant to claim the amount credited to the fund pertained to a specific period.

3. The appellant argued that the doctrine of unjust enrichment should not apply to amounts arising from finality of provisional assessment before 25-6-1999, as Rule 9B of the Central Excise Rules, 1944, incorporating the doctrine, was introduced only on that date.

4. The revenue contended that the authority below had issued an appropriate order, leading to a dispute over the application of the doctrine of unjust enrichment.

5. The Tribunal, after considering the arguments and precedents, noted that the delay in finalizing the provisional assessment had caused the appellant unnecessary litigation. Citing previous judgments, including one by the Supreme Court and another by the High Court of Madras, the Tribunal held that the appellant need not undergo the test of unjust enrichment due to the delay. Consequently, the appellant was entitled to the refund of &8377; 50,45,023/-, and the appeal was allowed.