2014 (1) TMI 1564 - AT - Central Excise

Refund of pre-deposit amount - unjust enrichment - Commissioner (Appeals) has held that for pre-deposit made by the assessee is not hit by the bar of unjust enrichment - Held that - Respondent has paid the disputed amount at the time of consideration of their appeal before he Commissioner (Appeals) as pre-deposit and as per Section 11B of the Central Excise Act, 1944 bar of unjust enrichment is applicable to the duty paid by the assessee only. Admittedly, the stay amount paid by the respondent at the time of considering of their stay application is not the duty. It is only for consideration of their appeal. Therefore, provisions of Section 11B of the Central Excise Act, 1944 are not applicable to the facts of the case - Therefore bar of unjust enrichment is not applicable - Following decision of Suvidhe Ltd. vs. UOI 1996 (2) TMI 136 - HIGH COURT OF JUDICATURE AT BOMBAY - Decided against Revenue.

Summary

Issues:
- Appeal against the impugned order regarding pre-deposit not being hit by unjust enrichment.
- Whether every refund claim filed by the assessee is hit by the bar of unjust enrichment.
- Applicability of Section 35F of the Central Excise Act, 1944 on pre-deposit.
- Interpretation of Section 11B of the Central Excise Act, 1944 in relation to unjust enrichment.

Analysis:
1. The Revenue appealed against an order where the Commissioner (Appeals) held that the pre-deposit made by the assessee was not affected by unjust enrichment. The Revenue contended that every refund claim by the assessee is subject to unjust enrichment, citing precedents. They argued that the burden of proof lies with the assessee to show that the doctrine of unjust enrichment does not apply. The Revenue insisted that refunds must be deposited in the Consumer Welfare Fund.

2. The respondent's counsel opposed the Revenue's stance, asserting that the amount was deposited during a stay application and not subject to unjust enrichment as per Section 35F of the Central Excise Act, 1944. Referring to a specific case, the counsel argued that the duty paid by the assessee alone is subject to the bar of unjust enrichment. The counsel emphasized that the stay amount paid was not duty but for appeal consideration, hence Section 11B of the Act does not apply. The counsel relied on a decision upheld by the Supreme Court to support this argument.

3. After hearing both sides, the Tribunal considered the submissions. It was noted that the respondent had paid the disputed amount as a pre-deposit during the appeal process, which, according to Section 11B of the Act, is subject to unjust enrichment only for the duty paid by the assessee. The Tribunal clarified that the stay amount paid was not duty but for appeal consideration, making Section 11B inapplicable. Referring to a decision by the High Court of Bombay affirmed by the Apex Court, the Tribunal concluded that unjust enrichment did not apply in this case. Consequently, the impugned order was upheld, and the Revenue's appeal was dismissed.