2018 (6) TMI 855 - AT - Central Excise

Refund of Excise duty paid - provisional assessment - amount paid twice by mistake on certain items on the billings made to M/s. Reliance Petrochemicals - denial on the ground of unjust enrichment - Held that - he period is prior to 25.6.1999 when Rule 9B(5) was introduced in Central Excise Rules, 1944 making the concept of unjust enrichment applicable for provisional assessment also - Rule 9B will be applicable only for provisional assessment made after 25.6.1999 - refund cannot be denied - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim for excess duty paid and unjust enrichment.
2. Differential duty in respect of design and engineering charges.

Analysis:

Issue 1: Refund claim for excess duty paid and unjust enrichment

The case involved a refund claim for excess duty paid by the respondent due to mistakenly paying duty twice on certain items supplied to M/s. Reliance Petrochemicals. The Superintendent of Central Excise confirmed the excess duty payment but noted that M/s. Reliance Petrochemicals had availed MODVAT credit for the excess duty, leading to the argument of unjust enrichment. The Commissioner (Appeals) found no evidence of double credit availed by M/s. Reliance Petrochemicals and set aside the rejection of the refund claim, citing a violation of natural justice in the process. The Revenue contended that the refund claim was hit by unjust enrichment as the duty had been passed on. However, the respondent argued that the concept of unjust enrichment could not be applied to clearances made before the introduction of Rule 9B(5) in Central Excise Rules, 1944. The Tribunal agreed with the respondent, citing a previous decision, and dismissed the appeal by the department.

Issue 2: Differential duty in respect of design and engineering charges

The Commissioner (Appeals) had earlier set aside the demand for differential duty related to design and engineering charges, remanding the matter to consider the refund eligibility. Despite this, the original authority confirmed the differential duty, which was again challenged by the department. The Tribunal noted that the issue had already been settled in the previous order-in-appeal, where the Commissioner had set aside the demand and focused on the refund eligibility. The Tribunal found no merit in the department's appeal, stating that the original authority should not have confirmed the differential duty after it had been set aside by the Commissioner. Consequently, the Tribunal dismissed the appeal by the department.

In conclusion, the Tribunal upheld the Commissioner (Appeals)' decision to set aside the differential duty demand and rejected the department's appeal based on the unjust enrichment argument, emphasizing the inapplicability of the concept to clearances made before the relevant rule's introduction.