2024 (9) TMI 401 - AT - Central Excise

Demand of interest - SCN for demanding the said interest amount is pending for adjudication - principles of unjust enrichment - HELD THAT - It is seen that the show cause notice demanding this interest was confirmed by the original Adjudicating Authority. The said show cause notice was settled under SVLDRS Scheme in this circumstances the question of refund of the amount confirmed in the said show cause notice does not arise. The lower Authority has gone into the question of unjust enrichment which was superfluous at the stage when the same authorities have held that refund is not admissible. The question of unjust enrichment would only arise when the authorities come to the conclusion that refund is admissible to the appellant on merits. Once the lower authority come to the conclusion that refund is admissible on merits only then they can go into the question of unjust enrichment - No order under unjust enrichment can be issued rejecting the refund claim, the only order which can be issued under unjust enrichment is sanctioning the refund claim and transferring amount to the Consumer Welfare Fund. There are no merit in the claim made by the appellant - appeal dismissed.

Summary

Issues:
Denial of refund claim based on limitation and unjust enrichment.

Analysis:
The appeal was filed against the denial of a refund claimed by the appellant. The appellant had issued supplementary invoices due to post-clearance variation in the price of oil, for which interest was paid under protest. The original Adjudicating Authority rejected the claim on grounds of limitation, unjust enrichment, and pending show cause notices demanding interest. The Commissioner (Appeal) upheld this decision, citing the Steel Authority of India case. The appellant argued that the principle of unjust enrichment did not apply as the interest paid was not recovered from customers and was paid under protest. The appellant also claimed that the refund claim was not time-barred and that the interest liability had been waived under the SVLDRS Scheme.

The Assistant Commissioner confirmed the demand of interest, which the appellant challenged under the SVLDRS Scheme. A discharge certificate was issued showing zero amount payable, indicating a waiver of interest. The Learner AR argued that the interest should be refunded based on the settlement under the SVLDRS Scheme. However, the Tribunal found this claim misleading, stating that the entire amount of interest was paid by the appellant, leading to the waiver of penalty. The Tribunal emphasized that the SVLDRS Scheme is meant to recover unpaid dues, not refund legally paid dues. The show cause notice demanding interest was settled under the SVLDRS Scheme, making the question of a refund irrelevant.

The Tribunal dismissed the appeal, stating that the lower authorities had already determined that a refund was not admissible on merits. The Tribunal noted that the consideration of unjust enrichment was unnecessary at this stage, as it would only be relevant if a refund were deemed admissible. The Tribunal concluded that there was no merit in the appellant's claim, leading to the dismissal of the appeal.