2010 (7) TMI 340 - AT - Central Excise

Refund unjust enrichment - excess wastage of raw material - allegation set aside by the Tribunal - amount paid during investigation could not have been obviously passed on to any customer - rejection of the refund claim on the ground of unjust enrichment is not justified

Summary

Issues: Refund of excess amount paid during investigation, denial of refund on grounds of time-bar and unjust enrichment, interpretation of relevant date for applying for refund post Tribunal's order.

In this case, the appellant had initially deposited Rs. 66,165.55 during investigation and later paid Rs. 30,000 as predeposit as directed by the Tribunal. The Tribunal's subsequent order favored the appellants, leading to the refund issue. The authorities denied the refund of Rs. 66,165.55 citing time-bar and unjust enrichment, questioning if the amount was passed on to someone else. The Tribunal found that since the demand was based on excess wastage of raw material, and this allegation was set aside, the amount paid during investigation could not have been passed on to a customer. Thus, rejecting the refund claim on the ground of unjust enrichment was deemed unjustified.

Regarding the time-bar for applying for a refund after a Tribunal's order, it was noted that the relevant date for such refund claims was specified in law from 11-5-2007. The appellants explained that due to the dealing hand's death, the refund claim could not be filed earlier. Only during a departmental audit did they realize their entitlement to the refund. The refund claim was filed within one year of the introduction of the new provision of law, Section 11B(5)(B)(ec) from 11-5-2007. Consequently, the ground of time-bar was considered inapplicable in this case.

Ultimately, the Tribunal held that the appellants were entitled to the refund of Rs. 66,165.55 arising from the Tribunal's order dated 27-10-1995. The impugned orders denying the refund were set aside, and the appeal was allowed with consequential benefits to the appellants. The judgment was pronounced in open court on 15-7-2010, providing a favorable outcome to the appellants in their quest for the refund of the excess amount paid during the investigation process.