2009 (9) TMI 408 - HC - Central Excise

Refund- unjust enrichment- Notification No. 341/76-Cus. dated 2-8-1976-The petitioner in the instant case had approached this court to direct the respondents to refund reimburse and pay to the petitioner the amount of extra duty collected in terms of CEGAT order. CEGAT by that order had taken the view that the goods are entitled to the benefit of Notification No. 341/76-Cus. dated 2-8-1976. Held that- In the instant case admittedly though CEGAT had held in favour of the petitioners there was no order passed by the respondents on the application for refund. Thus the respondents are directed to dispose of the pending application for refund according to law. The entire exercise to be completed not later than three months from today. Rule made absolute accordingly.

Summary

Issues:
1. Refund of extra duty collected in terms of CEGAT order
2. Requirement to fill unjust enrichment form for refund
3. Applicability of Section 11B of the Central Excise Act
4. Doctrine of unjust enrichment and restitution

Analysis:
1. The petitioner sought a refund of extra duty collected as per the CEGAT order dated 30th October, 1990, which granted the benefit of a specific customs notification to the goods. However, despite applying for a refund of the duty already paid, no order was passed by the respondents on the application for refund. The relief sought was based on the CEGAT order, indicating the need for the respondents to refund the duty amount as per the said order.

2. The petitioner contended that as traders, they should be exempt from filling the "unjust enrichment form" required for the refund process. However, the court emphasized the necessity of complying with this form, as evidenced by the communication from the petitioners acknowledging the requirement to fill the form in order to obtain the refund.

3. The judgment referred to the case law of Triveni Chemicals Ltd. v. Union of India to argue that once authorities pass an order of refund, Section 11B of the Central Excise Act, which pertains to unjust enrichment, would not be applicable. However, the court clarified that in the absence of a refund order from the authorities, the provisions of Section 11B must be adhered to, emphasizing the need to satisfy the test of unjust enrichment for any refund claim.

4. The court highlighted the doctrine of unjust enrichment, which arises when the retention of benefit is deemed unjust or inequitable, based on the principle of restitution. Referring to the Supreme Court's decision in Sahakari Khand Udyog Mandal Ltd. v. Commissioner of Central Excise and Customs, the court reiterated that Section 11B of the Central Excise Act recognizes this doctrine, requiring any person seeking a refund, even with a Tribunal order in their favor, to demonstrate compliance with the unjust enrichment principle. The judgment concluded by directing the respondents to process the pending refund application within three months in accordance with the law.