2016 (8) TMI 1111 - AT - Central Excise

Unjust enrichment - Refund claim - amount deposited by them on the direction of the higher judicial forum for hearing and disposing of the appeal filed by the appellant in respect of a period beyond limitation - Held that - the judgment of the Hon ble Delhi High Court in the case of Commissioner of Customs (I&G) v. Ericsson India Pvt. Ltd. 2013 (11) TMI 448 - DELHI HIGH COURT very clearly lays down the law indicates that the amount deposited after the clearance of the goods, question of unjust enrichment does not arise. Therefore, both the lower authorities have erred in coming to a conclusion that the refund claim is hit by bar of unjust enrichment. Even the reliance by the Revenue as to the applicability of the unjust enrichment to captive consumption is correct in the circumstances in which it was delivered but in the present case, the facts are totally different, the amount was deposited by the appellant on the direction of the appellate authorities. Therefore, the impugned order is unsustainable and liable to be set aside. - Decided in favour of appellant with consequential relief

Summary

Issues:
Refund claim based on unjust enrichment.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai concerns a refund claim by the Appellant, which is the third round of litigation on the same matter. The Tribunal previously ruled in favor of the Appellant due to a show cause notice not being issued within the prescribed time limit. In the current round, the Appellant challenges the order of the Commissioner of Central Excise seeking to deny the refund on grounds of unjust enrichment. The Appellant argues that previous Tribunal orders directed the refund and that the lower authorities erred in issuing the show cause notice and adjudicating it.

The Departmental Representative argues that unjust enrichment is relevant in refund cases, especially for captively consumed goods like textile yarn. The Tribunal notes that the Appellant seeks a refund of an amount deposited during the pendency of the appeal, which was beyond the limitation period. Referring to previous Tribunal orders, the Tribunal finds that the Appellant is eligible for the refund as the confirmed amounts were beyond the limitation period.

The Tribunal cites a previous order directing the grant of refund on the success of the appeal before higher authorities, emphasizing the binding nature of such directives. The Tribunal observes that the lower authorities erred in rejecting the refund claim based on unjust enrichment. The circular of CBEC clarifies the process for refund of pre-deposits during appeals, emphasizing the need for uniformity in handling such cases.

In a significant reference, the Tribunal mentions a judgment by the Delhi High Court indicating that the question of unjust enrichment does not arise when the amount is deposited after goods clearance. The Tribunal concludes that the lower authorities erred in applying the bar of unjust enrichment to the Appellant's refund claim, especially considering the circumstances of the case. Consequently, the impugned order is set aside, and the appeal is allowed with consequential relief as per the previous final order.

In summary, the Tribunal's detailed analysis addresses the issue of the refund claim based on unjust enrichment, highlighting the Appellant's arguments, the Departmental Representative's stance, relevant legal principles, and previous Tribunal orders. The Tribunal's decision ultimately sets aside the impugned order and allows the appeal, emphasizing the Appellant's eligibility for the refund based on the specific circumstances of the case.