2018 (10) TMI 22 - HC - Central Excise

Refund claim - unjust enrichment - Whether in the facts and circumstances of the case and in law was the Tribunal correct in holding that payment of duty by the assessee during the period 1988 to 1990 was provisional under Rule 9B of the erstwhile Central Excise Rules, 1944 and therefore, no question of unjust enrichment can arise? Held that - No fault can be found with the impugned order of the Tribunal holding that the assessment during the period 1988 to 1990 were provisional under Rule 9B of the Rules. Further, no question of unjust enrichment would arise, as the refund claims were filed in 1991 that is much before the amendment to Rule 9B of the Rules in the year 1999 which requires the officers of the Revenue before granting refund, to be satisfied that there is no unjust enrichment on finalization of the provisional assessment. The finding of fact by the Tribunal that the assessment were provisional under Rule 9B of the Rules cannot be found fault with in the absence of the same being shown to be perverse - appeal dismissed.

Summary

Issues:
Challenge to order dated 18th August 2016 passed by the Customs, Excise and Service Tax Appellate Tribunal under Section 35G of the Central Excise Act, 1944.
Interpretation of whether duty payment by the assessee during the period 1988 to 1990 was provisional under Rule 9B of the Central Excise Rules, 1944 and the implications on the claim of unjust enrichment.

Analysis:

Issue 1: Challenge to Tribunal Order
The appeal challenges the order passed by the Tribunal under Section 35G of the Central Excise Act, 1944. The key question of law raised by the Revenue is whether the Tribunal was correct in holding that the payment of duty by the assessee during the period 1988 to 1990 was provisional under Rule 9B of the Central Excise Rules, 1944, and consequently, whether the claim of unjust enrichment can be considered.

Issue 2: Provisional Assessment and Unjust Enrichment
The Respondent, engaged in manufacturing, obtained glass filament at an intermediate stage, which they claimed was not excisable. The Respondent filed a price list provisionally approved by the Assistant Commissioner under Rule 9B of the Rules and paid duty under protest, subsequently filing refund claims. It was determined that for the period 1988 to 1990, the glass filament was not excisable, leading to the Respondent being entitled to a refund. The Appellant contended that the goods were not provisionally assessed as duty was paid under protest. However, the Tribunal found that the clearance was provisional under Rule 9B, entitling the Respondent to a refund. The Revenue argued that as duty was paid under protest, the refund should be credited to the Consumer Welfare Fund. The Respondent's Counsel highlighted that the price list was provisionally approved by the Assistant Commissioner under Rule 9B, supported by documentary evidence. The Tribunal held that no unjust enrichment could arise as the refund claims were filed before the amendment to Rule 9B in 1999, which required satisfaction of no unjust enrichment before granting refunds on finalization of provisional assessments.

Conclusion:
The Tribunal's finding that the assessments during 1988 to 1990 were provisional under Rule 9B of the Rules was upheld, with no fault found in the impugned order. The appeal was dismissed, emphasizing that the proposed question did not give rise to a substantial question of law. Consequently, the appeal was dismissed with no order as to costs.