2007 (12) TMI 71 - AT - Central Excise

Refund in question had arisen out of finalization of provisional assessments for the period prior to 25-6-99 during disputed time refund arise because of finalization of provisional assessment cannot be effected by unjust enrichment - Such refund was governed exclusively by the provisions of Rule 9B of the Central Excise Rules rule 11B not applicable refund allowed

Summary

Issues:
1. Stay application for appeal consideration.
2. Recovery of excess duty paid.
3. Erroneous refund and unjust enrichment.

Analysis:
1. The appellants, Bharat Heavy Electricals Ltd. (BHEL), sought clearance from the 'Committee on Disputes' to pursue their appeal. The Tribunal decided that the appeal itself should be finally disposed of at this stage, thus dispensing with the need for a stay application.

2. BHEL had entered into contracts with State Electricity Boards for supply, installation, and commissioning of boilers. Provisional assessments were made for excisable goods cleared for these projects, leading to findings of shortage in duty payment in some cases and excess payment in others. The department issued a show-cause notice for recovery of the excess duty refunded to BHEL, alleging erroneous refund without considering unjust enrichment. The Tribunal, after reviewing the records, concluded that the refund was legal and set aside the demand for duty recovery.

3. The refund in question stemmed from finalizing provisional assessments before a specific date. During that period, refunds of excess duty were made without reference to a particular section of the Central Excise Act, as governed by Rule 9B of the Central Excise Rules, 1944. The lower authorities incorrectly held the refund as erroneous and demanded recovery based on unjust enrichment, which the Tribunal found to be in error. Consequently, the Tribunal allowed BHEL's appeal, setting aside the impugned order.