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Issues:
1. Refund claim under excise duty exemption notification. 2. Application of Rule 11 of the Central Excise Rules. 3. Limitation period for claiming refund. 4. Unjust enrichment and duty payment under protest. Analysis: The case involves a private limited company manufacturing drinking chocolate powder, liable for excise duty under the Central Excises & Salt Act, 1944. The company cleared goods during a financial year but did not exceed the specified limit for exemption. A refund application for excise duty was filed, but the Asstt. Collector granted a partial refund citing Rule 11 of the Central Excise Rules. The Collector of Central Excise (Appeals) and the Government of India also rejected part of the refund claim based on limitation, leading to a petition under Article 226 challenging the decisions. The petitioner contended that the authorities erred in denying the relief based on Rule 11, as the right to claim exemption accrues at the end of the financial year. The petitioner argued that the claim could not be rejected based on limitation as the application was filed before the end of the financial year. The court agreed, emphasizing that the manufacturer can avail of exemption only at the end of the financial year when it realizes the clearance did not exceed the limit. The court dismissed the argument that duty should have been paid under protest, as the manufacturer was not disputing the duty rate or liability to pay. The respondents raised the issue of unjust enrichment, claiming that the refund would lead to unjust enrichment as the duty was already passed on to customers. However, the court noted that the department failed to provide the necessary data to assess this claim. Referring to a previous judgment, the court held that without proper data, it was not possible to evaluate the unjust enrichment argument. Consequently, the court set aside the orders rejecting the refund claim and directed the Asstt. Collector to refund the duty paid for the specified period, with a deadline for payment and provision for interest if delayed. In conclusion, the court ruled in favor of the petitioner, highlighting that the denial of the refund claim based on limitation was incorrect. The court emphasized that the right to claim exemption arises at the end of the financial year and rejected the argument of duty payment under protest. The court also noted the lack of data to assess the unjust enrichment claim and directed the refund of the excise duty with provisions for interest if delayed.
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