2008 (12) TMI 186 - AT - Central Excise

Cenvat refund - that the amount in question was deposited by the appellants as against the Revenue s objection of wrong availment of credit. On the success of the appeal, the said pre-deposit is required to be refunded to the appellant as a consequential relief. It is well settled that principle of unjust-enrichment will not apply in the said case inasmuch as admittedly the said deposit was made on subsequent clearances of the goods and in any case related to the Cenvat credit availed on inputs refund allowed.

Summary

Issues:
Challenge to rejection of refund claim by authorities below.

Analysis:
The appellant's refund claim was rejected due to the wrong availment of Modvat credit of duty during a specific period. An amount was deposited by the appellant, and a show cause notice was issued, resulting in a partial demand confirmation. The demand was dropped on limitation grounds partially, but a balance was confirmed. Subsequent appeals and orders led to the dropping of the demand by the Assistant Commissioner and the Tribunal. The appellant sought a refund of the deposited amount, which was partially credited back. A refund application was filed, rejected, appealed, and ultimately allowed by the Commissioner (Appeals) based on the doctrine of unjust enrichment not being applicable.

In a de novo adjudication, the Assistant Commissioner again dropped the demand, leading to another refund claim by the appellant. This time, the amount was credited to the Consumer Welfare Fund due to unjust enrichment. The Commissioner (Appeals) upheld this decision, leading to the current appeal. The appellant argued against conducting adjudication for the same refund claim twice and cited the previous decision regarding the inapplicability of the unjust enrichment principle for pre-deposits.

The appellate tribunal agreed with the appellant's representative that the deposited amount should be refunded as it was made against the Revenue's objection of wrong credit availment. The tribunal emphasized that the principle of unjust enrichment does not apply in this case as the deposit was related to subsequent clearances of goods and Cenvat credit on inputs. The tribunal noted that a portion of the deposit had already been refunded without objection. Consequently, the tribunal set aside the impugned order and directed lower authorities to allow the refund of the disputed amount.

This judgment highlights the procedural and substantive aspects of the refund claim rejection, the application of the unjust enrichment principle, and the final decision to refund the disputed amount to the appellant based on the specific circumstances and legal precedents involved in the case.