2017 (3) TMI 1634 - AT - Central Excise

100% EOU - Refund claim - time limitation - denial on the ground of unjust enrichment - Held that - the refund arose only after the demand issue of duty on furnace oil has been settled by the Commissioner (Appeals) in Order-in-Appeal dated 10-3-2004 therefore the refund was supposed to be filed within one year from the date of Commissioner (Appeals) s order which the appellant has filed on 10-5-2004. Therefore the refund is well within the prescribed time-limit provided under Section 11B - refund is not time bar. Unjust enrichment - Held that - the appellant is a 100% EOU and exporting 100% of their final product. The duty was paid on the furnace oil which was used in the manufacture of exported goods. Therefore by virtue of above sub-clause (a) the unjust enrichment is not applicable in the fact of the present case. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim filed after expiry of one year from the relevant date.
2. Payment of duty not made with the jurisdictional authority.
3. Refund claim rejected on grounds of unjust enrichment.

Analysis:

1. Refund Time Limit Issue:
The appellant filed a refund claim for duty paid under protest after the Commissioner (Appeals) dropped the demand. The sanctioning authority rejected the claim as being filed after one year from the date of payment. However, the Tribunal held that the refund arose only after the Commissioner (Appeals) settled the demand issue, and thus, the claim within one year from the Commissioner's order was valid under Section 11B, not time-barred.

2. Jurisdictional Payment Issue:
The department rejected the refund claim stating the duty was paid in the Excise Commissionerate, not with the jurisdictional authority. The appellant argued that being a 100% EOU, the only jurisdiction for their operation was under the Export Promotion Zone. The Tribunal agreed, stating that as the EOU was under a specific jurisdiction, the refund claim was correctly filed with the Asstt. Commissioner of Customs, EPZ, and could not be rejected on jurisdictional grounds.

3. Unjust Enrichment Issue:
The refund claim was also rejected on the basis of unjust enrichment, citing a Supreme Court judgment. The appellant contended that being a 100% EOU exporting all goods, the provisions of unjust enrichment did not apply as per Section 11B(2) proviso clause (a). The Tribunal concurred, noting that the duty paid on furnace oil was used in the manufacture of goods for export, making the unjust enrichment provision inapplicable.

In conclusion, the Tribunal found in favor of the appellant, allowing the refund claim. The judgment highlighted the specific circumstances of the case, emphasizing the applicability of legal provisions and the unique nature of operations as a 100% EOU. The decision was based on a detailed analysis of the issues raised and relevant legal principles, ultimately granting relief to the appellant.