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Issues involved:
1. Whether the refund of Central Excise duty claimed is hit by the principle of unjust enrichment. 2. Applicability of Section 11B of the Central Excise Act to refund claims for provisional assessments. 3. Interpretation of Rule 9B(5) of the Central Excise Rules regarding adjustment of duty provisionally assessed. Issue 1: Unjust Enrichment The appellant, M/s. Hindustan Lever Ltd., claimed a refund of Central Excise duty after finalization of provisional assessments. The Assistant Commissioner rejected the refund claims citing incomplete submission of documents and lack of evidence showing that the duty burden was not passed on to customers. The Commissioner (Appeals) upheld the rejection, emphasizing the requirement of documents under Section 11B(1) of the Central Excise Act. The appellant argued that the refund was due automatically after finalization of assessments, citing precedents where claims for refund in provisional assessments were not subject to Section 11B. The Tribunal agreed, holding that the principle of unjust enrichment did not apply to provisional assessments finalized before the amendment of Rule 9B(5) in 1999. The Tribunal allowed the appeal, setting aside the impugned order. Issue 2: Section 11B Applicability The learned SDR contended that Section 11B of the Central Excise Act applied to all refund claims, including those arising from finalization of provisional assessments. The Tribunal, however, noted that the assessments were provisional due to deduction claims, and after finalization based on data provided by the appellant, the differential duty payable was found to be nil. Therefore, the Tribunal held that the appellant had met the requirements for refund without needing to prove payment of duty, as the duty provisionally assessed had been adjusted against the duty finally assessed under Rule 9B(5). Issue 3: Rule 9B(5) Interpretation The Tribunal referred to the Constitutional Bench's decision in Mafatlal Industries case, which stated that recoveries or refunds following adjustment under Rule 9B(5) were not governed by Section 11A or Section 11B. Citing various judgments, including the Madras High Court and Tribunal decisions, the Tribunal held that the amendment to Rule 9B(5) had prospective effect and did not apply retrospectively to finalized assessments before the amendment. As the refund claim was filed before the amendment of Rule 9B(5), the Tribunal concluded that the principle of unjust enrichment did not apply, granting relief to the appellant. In conclusion, the Appellate Tribunal held that the appellant was entitled to the refund of Central Excise duty as the principle of unjust enrichment did not apply to the provisional assessments finalized before the amendment of Rule 9B(5). The Tribunal set aside the rejection of the refund claims and allowed the appeal.
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