2011 (3) TMI 306 - HC - Central Excise

Refund on excess duty paid - Unjust enrichment - Refund became due on account of excess payment made at the time of provisional assessment - In the present case there could be no question of unjust enrichment as the assessee had allowed discount which entitled it to pay lesser duty - Held by the Tribunal that the present case was governed by the observations in para 14 of the judgment in M/s Allied Photographics Ltd. and the assessee became entitled to refund on account of excess duty paid as per order of final assessment - No substantial question of law arises - Hence, appeal is dismissed in favour of assessee .

Summary

Issues:
1. Application of the doctrine of unjust enrichment in a case of refund due to final assessment after provisional assessment.
2. Interpretation of Section 11B of the Central Excise Act, 1944 in the context of refund on account of excess payment made under Rule 9B of the Central Excise Rules, 1944.

Analysis:
1. The appeal was filed by the revenue under Section 35G of the Central Excise Act, 1944, challenging an order passed by the Customs, Excise & Service Tax Appellate Tribunal. The main issue raised was whether the doctrine of unjust enrichment applied when a party paid duty under protest following the finalization of provisional assessments. The assessee, registered under the Central Excise Act, 1944, had paid duty based on provisional assessment and later claimed a refund after the final assessment order. The Tribunal upheld the claim, stating that unjust enrichment did not apply in this case. The Adjudicating Authority and the appellate authority also supported this view, citing a judgment by the Hon'ble Supreme Court in the case of Allied Photographics India Ltd. The Tribunal's decision was based on the fact that duty was paid under protest after finalization of provisional assessment, making unjust enrichment inapplicable.

2. The revenue contended that the bar of unjust enrichment under Section 11B was applicable, as it was not a case of refund on final assessment due to excess payment under Rule 9B of the Central Excise Rules, 1944. However, the Court disagreed with this argument. The Court found that the refund became due because of an excess payment made during provisional assessment, and there was no unjust enrichment as the assessee had allowed a discount that entitled it to pay lesser duty. Citing the case of CCE Mumbai-II Vs. M/s Allied Photographics Ltd., the Court explained the difference between situations covered by Section 11B and those where a refund became due due to payments made under provisional assessment. The Court upheld the Tribunal's decision, stating that the case fell under the observations in the mentioned judgment, and no substantial question of law arose. Consequently, the appeal was dismissed.