2008 (9) TMI 253 - AT - Central Excise

Contention raised by the party that as the refund had accrued to them from finalisation of provisional assessment for a period prior to 25th June, 1999 the bar of unjust enrichment was not applicable to the refund claim was rejected and it was held that the amendment to Rule 9B(5) (which was made with effect from 25-6-1999) merely clarified the legal position existing from 1-8-1998 (the date on which Section 11B of the Act was amended) - as the entire claim for refund relates to excess duty paid for the period after 1-8-1998, the doctrine of unjust enrichment is applicable to this case

Summary

Issues:
1. Challenge against crediting duty to Consumer Welfare Fund under Section 11B of the Central Excise Act.
2. Applicability of the doctrine of unjust enrichment to the excess duty paid.
3. Opportunity for the assessee to adduce evidence against the bar of unjust enrichment.
4. Interpretation of the relevant legal provisions and case laws.

Analysis:
1. The appeal challenges the decision to credit excess duty amounts to the Consumer Welfare Fund under Section 11B of the Central Excise Act. The provisional assessments for fiscal 1999-2000 and April to June 2000 resulted in excess duty payments of Rs. 1,00,261/- and Rs. 23,961/- respectively, which were credited to the Fund. The appeals against these orders were rejected by the Commissioner (Appeals), leading to the present appeals by the assessee.

2. The counsel for the appellants argued that the excess duty determined for the period 1999-2000, predating the amendment to Rule 9B, should not be subject to the doctrine of unjust enrichment. Citing relevant case laws, the counsel contended that the doctrine does not apply to the duty paid before the amendment. However, for the excess duty paid post-amendment, it was claimed that the authorities did not provide a fair opportunity to present evidence against unjust enrichment. The Revenue relied on a Bombay High Court judgment to assert the doctrine's applicability to the entire refund claim arising from finalization of provisional assessments after a specific date.

3. Upon careful consideration, the Tribunal noted that most of the excess duty refund related to the period post-amendment, making the doctrine of unjust enrichment applicable. The High Court's ruling in a similar case supported this view, emphasizing the doctrine's applicability to the entire refund claim. The Tribunal highlighted the need for the original authority to assess whether the duty incidence was passed on to another party as per Section 12 of the Central Excise Act. It was acknowledged that the assessee was not given a chance to present evidence against unjust enrichment, necessitating a review by the original authority.

4. In conclusion, the Tribunal set aside the lower authorities' orders, except regarding the doctrine of unjust enrichment, and allowed the appeals by remand. The original authority was directed to issue a detailed order in compliance with legal requirements and principles of natural justice. The decision was dictated and pronounced in open court, ensuring transparency and procedural fairness in the proceedings.