2007 (12) TMI 62 - AT - Central Excise

It is an admitted fact that there was no payment of octroi by the assessee in respect of the subject goods - therefore, in terms of the Circular20/90, abatement of equalised octroi from cum-duty price or assessable value, granted by the lower appellate authority, is in order - doctrine of unjust enrichment was not applicable to refunds consequential to finalisation of provisional assessments - on both counts, the Revenue s appeal fails and the same is dismissed

Summary

Issues:
1. Disallowance of claim for abatement of various elements, including equalized octroi.
2. Excess payment of duty found for the period 1989-91.
3. Crediting the excess duty amount to the Consumer Welfare Fund on the ground of unjust enrichment.
4. Appeal by Revenue against the decision allowing abatement of octroi and cash refund.
5. Clarification of deductions like equalised sales tax, octroi, etc., in the absence of actual payment.
6. Applicability of the doctrine of unjust enrichment to refunds from finalization of provisional assessments.

Analysis:
1. The case involved the disallowance of the claim for abatement of various elements, including equalized octroi, during the period 1987-91. The original authority had disallowed the claim, leading to a demand for differential duty. However, the learned Commissioner (Appeals) allowed the abatement of octroi and cash refund, which was the subject of the Revenue's appeal.

2. An excess payment of duty for the period 1989-91 was identified, leading to a credit of the amount to the Consumer Welfare Fund based on the doctrine of unjust enrichment. The issue at hand was the validity of this credit and whether the doctrine of unjust enrichment applied in this scenario.

3. The Circular No. 20/90-CX.1 dated 30-8-1990 clarified deductions like equalized octroi in the absence of actual payment. The Board's circular emphasized substantiating deductions based on actual amounts paid. Since there was no payment of octroi by the assessee for the subject goods, the abatement of equalized octroi from the assessable value, as granted by the lower appellate authority, was deemed appropriate.

4. The settled legal position, as per the judgment in the case of Mafatlal Industries Ltd. v. Union of India, was that the doctrine of unjust enrichment did not apply to refunds resulting from the finalization of provisional assessments. Therefore, the Revenue's appeal on both counts failed, leading to its dismissal.

In conclusion, the appellate tribunal upheld the decision allowing abatement of octroi and cash refund, citing the absence of actual payment of octroi by the assessee. The application of the doctrine of unjust enrichment to refunds from finalization of provisional assessments was also clarified, leading to the dismissal of the Revenue's appeal.