2011 (5) TMI 778 - AT - Central Excise

Refund claim - unjust enrichment - classification appellant paid the central excise duty but filed an appeal challenging the classification - Commissioner (Appeals), allowed the appeal - appellant filed a refund claim - refund claim was sanctioned - order was reviewed by the Commissioner on 03.06.2005 and an appeal was preferred before the Commissioner (Appeals) who set aside the adjudication order sanctioning the refund claim and asked the appellant to pay the amount erroneously refunded to him - SDR submitted that the adjudication order was passed on 04.06.2004 and the same was reviewed by the Commissioner on 03.6.2005 which can be seen from the review order i.e. within one year of the order of the adjudication so the review order is within the limitation period on that ground the appeal fails - appeal is remanded back to the Commissioner (Appeals), order is set aside and the appeal is allowed

Summary

Issues:
1. Refund claim sanctioning and unjust enrichment liability.

Analysis:
The appeal revolves around the sanctioning of a refund claim to the appellant, which was set aside by the Commissioner (Appeals) due to the failure to discharge the liability of unjust enrichment. The appellant, a manufacturer of Metallised Plastic films, filed a classification list to classify the product under Chapter 15A(2) but faced a dispute with the department regarding the classification. The appellant paid central excise duty under Tariff item No. 68 but later succeeded in challenging the classification before the Commissioner (Appeals), resulting in a refund claim of duty paid and unutilized amount. The refund claim was initially sanctioned but later reviewed by the Commissioner, leading to the order being set aside and a demand for repayment. The appellant contended that the review order exceeded the one-year limitation period from the adjudication, and they were not given a fair opportunity to present their case, emphasizing the loss of documents by the department and the delayed sanction of the refund claim.

The learned Chartered Accountant representing the appellant argued against the review order's timing and procedural fairness, highlighting the long delay in refund processing and the rejection based on technicalities such as document signatures. On the other hand, the learned SDR for the respondents defended the review order's timing falling within the limitation period and expressed willingness for a remand to re-examine the issue. The Tribunal considered the submissions and found the review order to be within the one-year limit, citing precedent, and addressed the issue of proper hearing by remanding the matter back to the Commissioner (Appeals) for a fresh examination. The appellant was directed to cooperate and provide a copy of the order for reconsideration within a specified time frame, emphasizing the need for a timely disposal of the matter given its historical context dating back to 1985.

In conclusion, the impugned order was set aside, and the appeal was allowed with specific directives for the Commissioner (Appeals) to reevaluate the refund claim after affording the appellant a reasonable opportunity to present their case and examine the records thoroughly. The judgment focused on procedural fairness, adherence to limitation periods, and the importance of timely resolution in matters concerning long-standing refund claims.