2017 (5) TMI 614 - AT - Central Excise

Refund claim - excise duty paid on certain post manufacturing expenses(PME) - whether the refund of the appellant is time bar and whether it is hit by unjust enrichment? - Held that - entire issue of valuation and consequential determination of duty has finally came to an end only after Tribunal s order. The Tribunal s order was passed on 12-11-2003 therefore in my view refund arises only thereafter, hence refund claim filed on 23-4-2004 is within the time limit - As regard the unjust enrichment, it is admitted in the adjudication that assessment was finialised on 15-7-1984 and by way of corrigendum dated 15-10-1984 and necessary adjustment of duty was made on 18-7-1997, therefore the present refund claim is arising out of the deposited amount of provisional assessment. Therefore refund which is arising out of finalization of assessment will not be governed by the provision of unjust enrichment. The refund claim is neither hit by time bar nor hit by unjust enrichment - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Time bar on the refund claim
2. Unjust enrichment applicability

Analysis:

Issue 1: Time bar on the refund claim
The appellant had been paying excise duty on a provisional basis and filed a refund claim for excise duty paid on certain post-manufacturing expenses from 1974 to 1983. The Supreme Court directed the Asstt. Commissioner to finalize the assessment for the said period. The appellant filed a revised statement of deduction as per the Supreme Court's direction. Subsequently, some ad hoc payments were made, and the Asstt. Commissioner passed an order allowing certain deductions. The appellant filed an appeal before the Commissioner (Appeals), which allowed deductions on turnover discount and interest on receivables. The appellant claimed a refund, and after various proceedings, the Tribunal allowed the appeal on 12-11-2003. The appellant filed a refund claim again, leading to a show cause notice proposing rejection on the grounds of time bar and unjust enrichment. The Asstt. Commissioner rejected the refund claim, stating it was time-barred. The appellant contended that the refund claim was mature only after the Tribunal's order in 2003 and was not time-barred. The appellant argued that the duty was provisionally paid, and unjust enrichment was not applicable due to the specific provisions introduced after the period in question. The appellant's claim for refund was found to be within the time limit and not time-barred.

Issue 2: Unjust enrichment applicability
The appellant maintained that the duty was paid provisionally, and the assessment was finalized only after prolonged litigation, making unjust enrichment inapplicable. The appellant argued that the duty demand was determined through various legal proceedings, and the finalization of the assessment occurred after the Tribunal's order in 2003. The appellant claimed that the refund did not arise out of the final assessment and that unjust enrichment provisions were not applicable retroactively to the period from 1974 to 1983. The appellant cited relevant judgments to support their argument. The Tribunal found that the refund claim did not fall under unjust enrichment provisions as the assessment was provisional, and the duty was paid in excess after goods clearance. The Tribunal held that the refund claim was neither time-barred nor hit by unjust enrichment, allowing the appeal and disposing of the case.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT MUMBAI highlights the issues of time bar on the refund claim and the applicability of unjust enrichment, providing a comprehensive overview of the case and the arguments presented by both parties.