2009 (12) TMI 83 - HC - Central Excise

Refund Refund claim by the purchaser - The duty demanded and penalty imposed were recovered by the respondent by adjusting from the refund sanctioned to the seller of the appellant. The Tribunal granted refund in respect of the penalty recovered from them but declined to order grant of refund of duty recovered from them by applying the principle of unjust enrichment holding that the burden of duty stood passed on to the purchaser. The appellant as a purchaser filed claim for refund in 1996 which was rejected by the Original Authority on 30.12.2002. On further appeal, the Commissioner (Appeals) also upheld the order of the Original Authority. The Tribunal rejected the further appeal of the purchaserappellant holding that the purchases have taken place in 1986 when there was no provision to claim refund by a purchaser like the appellant in respect of excisable goods. The aforesaid provision was introduced only with effect from 20.9.1991 held that - The purchaser-appellant in any case acquired the right to seek refund only on 20.9.1991 when application for refund was filed. Apart from the fact that there was delay in filing the application, it is doubtful whether the purchaser like the appellant could have claimed refund in respect of the transaction which has taken place in 1986. The appeal is wholly misconceived and does not lead to framing of any question of law warranting its admission. Accordingly the appeal fails and the same is dismissed.

Summary

Issues:
1. Claim for refund of duty by the State of Haryana.
2. Application of the principle of unjust enrichment.
3. Time limit for claiming refund.
4. Eligibility of purchaser to claim refund for transactions before 1991.

Analysis:
1. The State of Haryana filed an appeal seeking to quash an order by the Tribunal declining its claim for refund of duty. The dispute arose from the purchase of plastic polythene covers in 1986. The Tribunal granted a refund for penalty but refused duty refund citing the principle of unjust enrichment, as the duty burden was deemed to have been passed on to the purchaser.

2. The Tribunal held that the appellant, as a purchaser, could not claim a refund for goods purchased in 1986 before the provision allowing such claims was introduced in 1991. It was noted that there was no evidence that the duty was paid under protest by the seller, and any recovery from the refund could not be considered payment under protest by the purchaser. The claim for refund needed to be made within six months from the date of purchase, which the appellant failed to do.

3. The Court found no justification to interfere with the Tribunal's decision. It was observed that the purchaser-appellant only acquired the right to seek a refund when the application was filed in 1991, leading to doubts on the eligibility to claim a refund for a transaction that occurred in 1986. The delay in filing the application further weakened the appellant's case, and the appeal was deemed misconceived, lacking any legal question for consideration.

In conclusion, the appeal by the State of Haryana was dismissed as it failed to establish grounds for challenging the Tribunal's decision. The judgment underscores the importance of timely claims for refunds, the application of the principle of unjust enrichment, and the eligibility criteria for purchasers seeking refunds for transactions predating relevant legal provisions.