2009 (7) TMI 1056 - AT - Central Excise

Refund claim - denial on the ground of unjust enrichment - Held that - The deposit was made as a condition of clearance of the goods from Customs. Such goods were further used by the appellant captively for the manufacture of their final product. It was in these circumstances, Tribunal held that deposits made prior to provisional relief of the goods have to pass the test of unjust enrichment - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on time bar and unjust enrichment.

Analysis:
The case involved the appellants depositing Rs. 3,90,156/- during an investigation, with subsequent confirmation of demand and penalty imposition. The Tribunal ruled in favor of the assessee, leading to a refund claim of Rs. 8,55,312/- being rejected by the original authority on grounds of time bar and unjust enrichment. The Commissioner (Appeals) favored the appellant on the time bar issue, stating that the amount was a deposit with the Revenue, not subject to time limits. However, the issue of unjust enrichment was contested, citing judgments like M/s. Suvidhe Ltd. v. UOI and M/s. Sahakari Khand Udyog Mandal Ltd. v. CCE. The appellant argued that unjust enrichment provisions do not apply to deposits, referencing various decisions supporting this stance.

The appellant's advocate highlighted precedents like M/s. Morarjee Goculdas Spg. & Wvg. Mills Co. Ltd. v. CCE and M/s. Godrej Industries Ltd. v. CCE, asserting that pre-deposits do not attract unjust enrichment. In contrast, the JDR referenced the case of United Spirit Ltd. v. CC (Import), Nhava Sheva, emphasizing that deposits made before goods clearance must meet the unjust enrichment challenge upon appeal success. The Tribunal differentiated between deposits made for clearance conditions and those made during investigation or after demand confirmation, stating that the former must pass the unjust enrichment test, while the latter do not fall under such provisions.

Ultimately, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant. The judgment clarified the distinction between deposits made for different purposes concerning the application of unjust enrichment principles, leading to the decision in favor of the appellant.