2012 (11) TMI 1034 - AT - Central Excise

CENVAT Credit - Revenue contends that drums/containers in which the chemicals were brought to the factory and which were subsequently cleared are liable to discharge duty liability - Held that - refund which became liable to be paid to the appellant as a consequence of the earlier decision of the Tribunal stands rejected by the lower authorities on two grounds (i) on the ground that the same cannot be refunded in cash, and (ii) that the appellant has not satisfied the unjust enrichment angle - as the amount deposited was in the nature of pre-deposit, the principles of unjust enrichment would not apply in terms of the law declared in the above referred judgment. Further the appellants are in agreement to get refund claim by way of credit entry in their Cenvat credit account - Decided in favour of assessee.

Summary

Issues: Dispute over Cenvat credit availed, refund claim rejection on grounds of cash refund and unjust enrichment.

The judgment pertains to a dispute regarding Cenvat credit availed by the appellant in 1997, concerning drums/containers and duty liability. The appellant deposited an amount during the proceedings, which was later found in favor of the assessee by the Tribunal. Subsequently, the appellant sought a refund of the deposited amount, but the original adjudicating authority rejected the claim citing inability to refund in cash and concerns of unjust enrichment due to lack of conclusive proof. The Commissioner (Appeals) upheld this decision, emphasizing the principles of unjust enrichment and absence of evidence showing non-recovery of duty from customers.

Upon reviewing submissions, the Tribunal noted that the refund, mandated by its earlier decision, was denied by lower authorities based on the grounds of cash refund impossibility and unjust enrichment concerns. The appellant's advocate argued that the unjust enrichment principle should not apply to pre-deposits during investigation/adjudication, citing relevant judicial precedents, including the Glaxo Smithkline Consumer Healthcare Ltd. case. Agreeing with the advocate, the Tribunal ruled that as the deposit was akin to a pre-deposit, unjust enrichment principles did not apply, directing the refund to be credited to the Cenvat account as per the appellant's agreement.

The advocate additionally requested interest for delayed refund, which was deemed beyond the scope of the current order. The Tribunal advised the appellant to raise this claim before the original adjudicating authority if desired. Consequently, the appeal was disposed of in the manner outlined, with instructions for the authorities to process the refund accordingly.