2015 (11) TMI 88 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Bar of limitation - Duty paid under protest - Held that - Refund which was rejected on the ground of unjust enrichment by the original authority vide order dated 13/9/1989 has been allowed by setting aside the Order-in-Original. It is undisputed that after this order in appeal dated 24/4/1990 the Revenue has not filed any appeal against the said order dated 24/4/1990 therefore same attained finality. Thereafter by way of another show cause notice the Asstt. Commissioner again raised point of unjust enrichment and the same was adjudicated against assessee and Commissioner (Appeals) upheld the same vide impugned order. - proceedings is absolutely non est and infructuous for the reason that once the issue has been settled by the Commissioner (Appeals) without challenging the same Rvenue could not again raised the same issue by way of another show cause notice and deciding the same contrarily by taking U-turn. The Asstt. Commissioner and Ld. Commissioner (Appeals) in the subsequent proceedings held that the provision of unjust enrichment is applicable in the case pertaining to the period before the enactment of provision of unjust enrichment and that the refund is sanctioned subsequent to the enactment. Even though contention of the Ld. Asstt. Commissioner is taken as correct but this contention could have been raised not by issuing fresh show cause notice but by way of appeal against the earlier order (dated 24/4/1999) of the Commissioner (Appeals). Since the department failed to file an appeal against the said order the order dated 24/4/1999 passed by the Commissioner (Appeals) has attained finality and all the proceedings subsequent to that by way of another show cause and adjudication and appeal become non-est and therefore the order dated 24/4/1999 shall prevail by which it was held that unjust enrichment is not applicable. In view of this position the refund claim rejected on the ground of unjust enrichment in the impugned order is not sustainable. - impugned order rejecting claim on the ground of unjust enrichment as well as limitation is not sustainable hence the same is set aside. - Decided in favour of assessee.

Issues:
1. Classification of final product under dispute.
2. Rejection of refund claim based on unjust enrichment.
3. Rejection of refund claim based on limitation.

Issue 1: Classification of final product under dispute
The case involved a dispute over the classification of the final product of the appellant. The Adjudicating Authority confirmed the classification under T.I. 15-AA and demanded duty payment. The Collector, Central Excise (Appeals) upheld this classification. The appellant filed a refund claim, which was initially rejected on the grounds of unjust enrichment based on a Bombay High Court judgment. However, the Collector C. Ex. (Appeals) allowed the appeal, stating that the concept of unjust enrichment is alien to Section 11B of the Central Excise Act, 1944. The appellant's subsequent refund claim was rejected on the same ground, leading to further appeals and legal proceedings.

Issue 2: Rejection of refund claim based on unjust enrichment
The appellant argued that the rejection of the refund claim on the grounds of unjust enrichment was not valid. The Commissioner (Appeals) had previously allowed the appeal on this issue, stating that unjust enrichment is not applicable under Section 11B of the Act. The Tribunal found that the subsequent proceedings raising the issue of unjust enrichment were non est and infructuous since the earlier order had attained finality. The Tribunal emphasized that the appellant's contest on the classification issue itself was an expression of protest, indicating that duty was paid under protest. The Tribunal referred to the classification list filed by the appellant in 1982, explicitly stating that duty would be paid under protest. Therefore, the rejection of the refund claim based on unjust enrichment was deemed unsustainable.

Issue 3: Rejection of refund claim based on limitation
The rejection of the refund claim on the grounds of limitation was also challenged by the appellant. The Asstt. Commissioner raised the issue of limitation for the first time, stating that the appellant had not complied with the procedure for payment of duty under protest. The Tribunal noted that the appellant's contest on the classification issue itself constituted a protest, and the payment of duty during the period in question was considered to be under protest. The Tribunal referred to a previous judgment to support the argument that provisional payment of duty, as indicated in the classification list, should be considered as payment under protest. Therefore, the rejection of the refund claim based on limitation was set aside.

In conclusion, the Tribunal set aside the impugned order rejecting the refund claim on the grounds of unjust enrichment and limitation. The appeal was allowed, providing consequential relief in accordance with the law.

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