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2015 (1) TMI 127 - AT - Central ExciseDenial of refund claim - Unjust enrichment - amount deposited during investigation - and amount of pre-deposit - Held that - Ruling of the Hon ble Apex Court in the case of Sahakari Khand Udyog Mandal (2005 (3) TMI 116 - SUPREME COURT OF INDIA) is not applicable in the facts of this case, the facts being totally different and there is no finding in this case that the appellant have collected the disputed amount from anybody. Secondly, I find that so far the amount of ₹ 6 lakhs deposited during the investigation is concerned, the said amount was paid under protest and also relying on the ruling of this Tribunal in the case of Plas Pack Industries (2004 (2) TMI 125 - CESTAT, MUMBAI) wherein it was held that bar of unjust enrichment is not attracted. So far the amount of ₹ 4 lakhs deposited as pre-deposit under Section 35G of the Act following the Hon ble Bombay High Court s decision in the case of Suvidhe Ltd. (1996 (2) TMI 136 - HIGH COURT OF JUDICATURE AT BOMBAY), I hold that the doctrine of unjust enrichment is not attracted on the said amount. - order of the Commissioner (Appeals) as cryptic and non-speaking as there is no finding recorded and there is failure to exercise his power, as the Commissioner (Appeals) has failed to make any enquiry regarding the ground of unjust enrichment alleged by the Revenue. - Refund allowed - Decided in favour of assesse.
Issues:
1. Refund of amount paid during investigation 2. Pre-deposit under Section 35F of the Central Excise Act, 1944 3. Application of the doctrine of unjust enrichment 4. Appeal challenging the order of the Commissioner (Appeals) Issue 1: Refund of amount paid during investigation The appellant, engaged in manufacturing and exporting organic compounds, deposited a sum of Rs. 6 lakhs during investigation following search and seizure proceedings. The Tribunal held that there was no undervaluation case against the appellant and confirmed the confiscation of goods. The Commissioner (Appeals) imposed a redemption fine and penalties. The appellant applied for a refund of Rs. 10 lakhs, which was granted by the Dy. Commissioner based on a report from the Range Superintendent and a Chartered Accountant's certificate. The Revenue appealed, arguing that the refund was not justified due to unjust enrichment. The appellant contended that the amount was paid under protest and relied on legal precedents to support their claim. Issue 2: Pre-deposit under Section 35F of the Central Excise Act, 1944 The appellant had also deposited Rs. 4 lakhs as a pre-deposit during the appeal process. The appellant argued that unjust enrichment does not apply to such deposits, citing relevant court decisions. The Tribunal considered the legal position and held that the doctrine of unjust enrichment did not apply to the pre-deposit amount, following the precedents set by the Bombay High Court. Issue 3: Application of the doctrine of unjust enrichment The Commissioner (Appeals) set aside the refund order, citing the doctrine of unjust enrichment based on a Supreme Court ruling. The appellant challenged this decision, arguing that the facts of their case differed from the precedent cited. The Tribunal agreed with the appellant, finding that the doctrine of unjust enrichment was not applicable to the amounts paid by the appellant during the investigation and appeal process. The Tribunal also criticized the Commissioner (Appeals) for not conducting a proper enquiry into the unjust enrichment claim. Issue 4: Appeal challenging the order of the Commissioner (Appeals) The Tribunal allowed the appeal in favor of the appellant, overturning the decision of the Commissioner (Appeals). The Tribunal found that the Commissioner's order was cryptic, non-speaking, and lacked proper findings. The Tribunal held that the Commissioner had failed to exercise jurisdiction by not investigating the unjust enrichment claim adequately. Consequently, the Tribunal set aside the Commissioner's order and granted relief to the appellant. This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's decision on each issue, ensuring a comprehensive understanding of the legal aspects discussed in the case.
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