2018 (10) TMI 816 - AT - Central Excise

Refund of duty paid - time limitation - unjust enrichment - Held that - Since pursuant to the favorable adjudication order dated 24.12.2010 passed by the Additional Commissioner of Central Excise, the appellant had filed the refund claim on 25.02.2011, such claim application, in my considered opinion, cannot be rejected on the ground that the same is barred by limitation of time - refund application having been filed well within the prescribed time limit provided under the statute, the same is maintainable for consideration of the refund benefit. Unjust enrichment - Held that - The documents available in the case records satisfies the requirements of the proviso attached to sub-section (2) of Section 11B of the Act that the incidence of excise duty as per the refund application, has not been passed on by the appellant to any other person and such incidence has all along been borne by it. Therefore, the refund application will not be hit by doctrine of unjust enrichment. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund application based on limitation and doctrine of unjust enrichment.

Analysis:
The case involved the rejection of a refund application by the appellant on the grounds of limitation and unjust enrichment. The appellant, a dealer of excisable goods, was not engaged in the manufacture of the goods in question. The Central Excise duty liability was initially sought from the appellant, but the adjudicating authority correctly held that duty cannot be collected from a dealer. The appellant filed a refund claim after a favorable adjudication order, within the prescribed time limit, which the tribunal deemed as maintainable. The relevant date for the refund application was considered to be the date of the favorable order, falling within the statutory time frame.

Regarding the doctrine of unjust enrichment, the appellant demonstrated through balance sheet entries and a certificate from a Chartered Accountant that the excise duty paid had not been passed on to buyers and was reflected as a deposit in their accounts. The tribunal found that the requirements of the law were satisfied, as the incidence of the duty had not been transferred to any other party. Consequently, the refund application was not affected by unjust enrichment.

In conclusion, the tribunal found no merit in upholding the rejection of the refund application. The impugned order was set aside, and the appeal was allowed in favor of the appellant, granting them the consequential benefit of a refund. The tribunal's decision was based on the correct interpretation of the law regarding limitation for refund claims and the application of the doctrine of unjust enrichment.