2007 (8) TMI 187 - AT - Central Excise

Applicability of Unjust Enrichment when duty was paid under protest Dept. pressurized to pay duty at higher MRP Gate passes were also endorsed with words under protest Hence it is not important that letter of protest was submitted 10 days later to date of payment Refund allowed

Summary

Issues:
1. Claim for refund of excess duty paid on old stock.
2. Time bar for claiming refund.
3. Unjust enrichment.

Analysis:
1. The case involved a dispute over the refund claim of excess duty paid by the respondents on old stock of blades. The respondents cleared the old stock at an increased MRP of Rs. 4/- under pressure from the department and paid the duty under protest. Subsequently, they claimed a refund of the excess duty paid amounting to Rs. 1,33,440/-. The original authority rejected the claim citing time bar and unjust enrichment. The matter was appealed to the Commissioner, who allowed the respondent's appeal, leading to the Revenue challenging the Commissioner's order.

2. The Revenue contended that the refund claim was time-barred as the letter of protest was submitted after the payment of duty on the old stock at Rs. 4/- MRP. Citing case laws, the Revenue argued that the protest would only be effective from the date of the letter of protest, making the claim hit by time bar. Additionally, it was claimed that the case law relied upon by the Commissioner did not appear relevant.

3. During the hearing, the advocate for the respondents argued that the duty payment under protest was mentioned in the gate pass itself, followed by a formal letter of protest. It was emphasized that the MRP printed on the packs remained Rs. 3.50/-, and customers would only pay that amount, negating the possibility of passing on the duty burden. The advocate distinguished the facts of the present case from the case laws cited by the Revenue. The Tribunal found that the issue of time bar and unjust enrichment was correctly examined by the Commissioner. It was established that the respondents had protested the duty payment from the outset, and the printed MRP on the packs prevented any unjust enrichment. Consequently, the Revenue's appeal was rejected, and the Commissioner's order was upheld.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal principles, and the Tribunal's reasoning leading to the final decision.