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2017 (11) TMI 273 - AT - Central ExciseRefund of deposit made during investigation - denial on the ground of time limitation and unjust enrichment - Section 11B of CEA 1944 - case of appellant is that the amount of refund is of deposit made during the investigation therefore it is not a duty and refund of such amount is not governed by Section 11B of CEA 1944 - Held that - the amount paid was under the head of Central Excise duty therefore this is a case of refund of excise duty and not anything else if this be so the refund of duty in the present case is clearly governed by Section 11B of Central Excise Act 1944 - As per the provisions of Section 11B sub-section (5) (B) (ec) the relevant date which is taken for 1 year limitation is the date of passing of the order by which the demand was dropped. In the present case the order was passed on 12.7.2010 refund claim was filed on 1.2.2012 that is much after the 1 year of relevant date accordingly the refund is clearly time barred. Unjust enrichment - Held that - Hon ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. Vs. Commissioner 2005 (3) TMI 116 - SUPREME COURT OF INDIA held that every refund should be passed through the test of unjust enrichment therefore even the amount deposited during the investigation refund of the same has to pass through test of unjust enrichment. The appellant have failed to establish that incidence of refund amount has not been passed on to any other person. Appeal dismissed - decided against appellant.
Issues:
1. Whether the refund claim made by the appellant is time-barred under Section 11B of the Central Excise Act, 1944? 2. Whether the doctrine of unjust enrichment applies to the refund claim? Analysis: Issue 1: Time-barred Refund Claim The case involved a demand for duty against the appellant, who made a pre-deposit during the investigation. The appellant later filed a refund claim for the deposited amount. The appellant argued that the refund was not governed by Section 11B of the Central Excise Act as it was a deposit made under protest during the investigation, not a duty. The appellant cited various judgments in support of this argument. However, the Revenue contended that the deposit was indeed a duty, and Section 11B applied. The relevant date for the limitation under Section 11B was the date of passing the order dropping the demand. The Tribunal found that the refund claim was filed after the one-year limitation period from the relevant date, thus making it time-barred. The Tribunal emphasized that the statutory provision of Section 11B should be strictly followed, as per the Supreme Court's ruling in Sahakari Khand Udyog case. Issue 2: Doctrine of Unjust Enrichment Regarding the doctrine of unjust enrichment, the Revenue argued that the burden was on the appellant to prove that the duty incidence had not been passed on to any other person. The Revenue contended that the appellant failed to discharge this burden, making the doctrine of unjust enrichment applicable. The Tribunal held that even for amounts deposited during the investigation, the doctrine of unjust enrichment must be applied. Citing the Supreme Court's decision in Sahakari Khand Udyog Mandal Ltd. case, the Tribunal emphasized that every refund must undergo the test of unjust enrichment. As the appellant could not establish that the refund amount had not been passed on, the Tribunal concluded that the refund claim was hit by unjust enrichment. Consequently, the Tribunal upheld the impugned order rejecting the refund claim, dismissing the appeal. In conclusion, the Tribunal found the refund claim to be time-barred under Section 11B and hit by the doctrine of unjust enrichment, thereby upholding the decision to reject the refund claim.
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