2001 (6) TMI 328 - AT - Central Excise

Summary

Issues:
1. Refund claim rejection on grounds of time-bar and unjust enrichment.

Analysis:
1. The appellant, a sugar factory, challenged the price fixation for levy sugar before the High Court, which was later directed to be refixed by the Supreme Court. The appellant claimed a refund of excess duty paid due to the price difference. The Department rejected the refund claim citing time-bar and unjust enrichment. The appellant contended that the duty payment was under protest and provisional assessment due to the pending litigation, thus not subject to the limitation provisions of Section 11B(1).

2. The Advocate argued that the payment under protest exempts the claim from the limitation period, referencing the Supreme Court's decision in Mafatlal Industries Ltd. v. Union of India. The Departmental authorities, including the Assistant Commissioner and Commissioner (Appeals), upheld the rejection based on unjust enrichment and time-bar. The JDR emphasized that the appellant admitted passing on the duty incidence to the government bodies, invoking Section 11B(2) and the limitation period starting from the refixed price notification date.

3. The Tribunal analyzed the applicability of Section 11B to the appellant's case, considering the payment under protest due to the High Court's interim order. Relying on Mafatlal Industries, the Tribunal concluded that the limitation provisions did not apply to the appellant's refund claim. The lower appellate authority's view on the limitation period was deemed unreasonable, as the payment under protest should exempt the claim from any time limitation under Section 11B.

4. The Tribunal rejected the appellant's argument to treat the duty payment as provisional assessment under Rule 9B(1) to avoid unjust enrichment. The appellant's selective reliance on different provisions was deemed inconsistent. The Tribunal upheld the Department's rejection based on unjust enrichment, as the appellant failed to prove that the duty incidence was not passed on to the buyers of levy sugar. Consequently, the claim for cash refund was denied on the grounds of unjust enrichment.

5. Ultimately, the Tribunal allowed the refund claim but directed the amount to be credited to the Consumer Welfare Fund, setting aside the decisions of the lower authorities. The Tribunal's decision was based on the appellant's successful argument regarding the payment under protest and the inapplicability of the limitation provisions, despite rejecting the unjust enrichment defense put forth by the Department.