2009 (4) TMI 159 - AT - Central Excise

Refund of duty paid under protest The respondents filed two refund claims on 6-3-99 for the amount of duty of Rs. 9, 10, 26, 730/- and 52, 18, 698/- which they paid under protest during the period July 1996 to December 1998 on raw Naptha. The Original Authority rejected the refund claims on the ground that refund claims were barred by limitation and they failed to fulfil the condition of Unjust Enrichment and the goods were not accompanied with the proper duty paying documents. The Commissioner (Appeals) set aside the adjudication order - held that department were having duty paying documents and there fore no reason for denying refund regarding unjust enrichment CA certificate and cerifixcate from FICC are sufficient to discharge the burden - When non-issuance of CT-2 certificate was challenged by the appellant the success of their appeal is not an empty formality and the appellate order is required to be implemented - that refund made by the appellant cannot be held to be held barred by limitation

Issues Involved:
1. Limitation period for filing refund claims.
2. Payment of duty under protest.
3. Principle of unjust enrichment.
4. Submission of original duty-paying documents.

Detailed Analysis:

1. Limitation Period for Filing Refund Claims:
The Revenue argued that the refund claims were barred by limitation as per Explanation (B) clause (e) to Section 11B(5) of the Central Excise Act, 1944, which states the relevant date for availing the refund claim would be the date of purchase of the goods. The respondents filed the refund claims on 6-3-99 for the duty paid during 1996-97 and 1997-98, which the Revenue claimed was beyond the permissible period. However, the Tribunal found that the respondents filed the refund claim within six months from the date of the Commissioner (Appeals) order, which allowed the concessional rate of duty. Therefore, the claims were not barred by limitation.

2. Payment of Duty Under Protest:
The Revenue contended that the respondents had not paid the duty under protest as per Rule 223B of the erstwhile Rules. However, the Tribunal concluded that the filing of an appeal against the rejection order by the Assistant Commissioner amounted to payment under protest. This was supported by the precedent set in the case of Bayshore Glass Trading Pvt. Ltd., where it was held that filing an appeal against an assessment order is by itself a protest. Thus, the limitation of six months did not apply as the duty was paid under protest.

3. Principle of Unjust Enrichment:
The Revenue argued that the refund claims were hit by the principle of unjust enrichment since the respondents did not provide original duty-paying documents to prove that the incidence of duty was borne by them. The Tribunal, however, referred to the certificate from the Fertilizer Industry Coordination Committee and the Chartered Accountant Certificate, which indicated that the burden of duty was not passed on to any other person. This was further supported by the Supreme Court's decision in the case of State of Rajasthan v. Hindustan Copper Ltd., which stated that when prices are controlled by the government and do not include the higher duty burden, there is no unjust enrichment.

4. Submission of Original Duty-Paying Documents:
The Revenue's claim that the respondents had not submitted original duty-paying documents was refuted by the Tribunal. The respondents provided all relevant documents, including copies of TR-6 challans, invoices from BPCL, and RT-12 returns, which were duly assessed by the department. The Tribunal noted that the department had issued CT-2 certificates based on the same documents for a later period, indicating that the documents were sufficient and valid.

Conclusion:
The Tribunal found no infirmity in the order of the Commissioner (Appeals) and rejected the appeal filed by the Revenue. The respondents' refund claims were deemed timely, the duty was paid under protest, there was no unjust enrichment, and the necessary duty-paying documents were adequately provided. The decision upheld the respondents' eligibility for the concessional rate of duty and the subsequent refund claims.

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