1996 (5) TMI 175 - AT - Central Excise

Summary

Issues:
1. Refund claim for duty paid on LDPE Bags filed beyond the limitation period.
2. Compliance with Rule 233B of the Central Excise Rules regarding payment under protest.
3. Unjust enrichment and passing on the burden of duty to customers.
4. Applicability of amended provisions of Section 11B and retrospective operation.

Analysis:
1. The appeal was against the Order-in-Appeal confirming the Order-in-Original for a refund claim for duty paid on LDPE Bags. The appellant claimed the duty was paid under protest, but the department objected citing non-compliance with Rule 233B and passing on the duty burden to customers. The claim was rejected by the Assistant Collector as time-barred under Section 11B of the Central Excises & Salt Act.

2. The appellant's advocate argued that the letter of protest was filed on 1-7-1982, complying with Rule 233B. He contended that the refund rejection based on unjust enrichment was unjustified as the goods were only supplied to one entity. The Tribunal found that the appellant had filed the protest letter and endorsed documents showing payment under protest, overlooking minor procedural lapses.

3. The JDR submitted that even if the limitation bar did not apply, the refund claim needed scrutiny for unjust enrichment based on the Supreme Court's judgment. The Tribunal noted that the rejection based on unjust enrichment does not authorize total claim rejection. The authorities must assess entitlement to refund and whether it would result in unjust enrichment. If the duty burden was passed to customers, the refund amount should be directed to the Consumer Welfare Fund.

4. The Tribunal held that the demand was not time-barred and directed the authority to reexamine the refund claim under the amended Section 11B provisions. The authority was instructed to grant a personal hearing, allow evidence submission to prove passing on the refund benefits to customers, and sanction appropriate refund accordingly.