2001 (1) TMI 704 - AT - Central Excise

Summary

Issues Involved:
1. Unjust enrichment in the grant of refund.
2. Applicability of amended Section 11B of the Central Excise Act to pending and finalized refund claims.
3. Finality of Tribunal orders and their enforcement.

Issue-wise Detailed Analysis:

1. Unjust Enrichment in the Grant of Refund:
The central issue revolves around whether the refund claims, which had reached finality, are subject to the doctrine of unjust enrichment. The Tribunal had previously ordered refunds, but the authorities issued show cause notices arguing that the refunds were hit by unjust enrichment. The appellants contended that the claims for refund after the amendment to Section 11B introducing unjust enrichment provisions were not enforceable, as established by the Apex Court in Mafatlal Industries Ltd. The Tribunal dismissed the appeals related to the periods 1-4-1989 to 30-6-1989 and 1-7-1989 to 30-9-1989 as not pressed.

2. Applicability of Amended Section 11B of the Central Excise Act:
For the claims pertaining to the period 1-5-1980 to 31-12-1988, the appellants argued that the amended Section 11B did not apply to cases where the proceedings had reached finality. The Tribunal had allowed the refunds, and the Department's issuance of show cause notices based on unjust enrichment after the amendment was contested. The Tribunal's earlier judgment in Dalmia Cement (Bharat) Ltd. v. C.C.E., Trichy, supported this view, stating that the amended Section did not have retrospective effect. The Apex Court's judgment in Mafatlal Industries clarified that unjust enrichment provisions do not apply to finalized orders.

3. Finality of Tribunal Orders and Their Enforcement:
The Tribunal emphasized that once an order reaches finality, the doctrine of unjust enrichment does not apply. The Department is bound to refund the amounts as per the final orders of the Tribunal. The Tribunal referred to its own judgment in the appellant's case and the Apex Court's judgment in Mafatlal Industries, which held that the provisions of unjust enrichment do not apply to matters that have attained finality. The Tribunal reiterated that the amended Section 11B cannot retrospectively affect finalized orders.

Conclusion:
The Tribunal concluded that the impugned orders could not be sustained in law. The appeals related to the periods 1-5-1980 to 31-12-1988 were allowed, directing the Department to make the refunds. The appeals E/511/96 and E/512/96 were dismissed as not pressed, while the appeals E/506 to 510/96 were allowed with consequential benefits to the appellants. The Tribunal's decision was based on the legal position established by the Apex Court in Mafatlal Industries and its own precedents, ensuring that finalized orders are enforced without the application of the amended unjust enrichment provisions.