2014 (4) TMI 576 - AT - Central Excise

Denial of refund claim - Whether the appellant is eligible for refund of the amount paid in excess by them prior to 25.06.1999 for which there was a provisional assessment - Held that - referral order 2013 (9) TMI 652 - CESTAT AHMEDABAD had only referred the question of applicability of unjust enrichment to the refund arising on finalization of provisional assessment. We find that the referral order was specifically referring to only this issue wherein there were contrary views as to applicability of unjust enrichment which were introduced in Rule 9B(V) of Central Excise Rules, 2002 w.e.f. 25.06.1999. Though the referral Bench, in their order, stated two questions that arose in the appeal and fell for their consideration, referral Bench in their wisdom had only referred one question to the Larger Bench - doctrine of unjust enrichment will not be attracted to the refunds pertaining to the finalization of provisional assessment for the period prior to 25.06.1999 when the linking proviso under Rule 9B(5) of Central Excise Rules was not in existence. Since the Larger Bench has already ruled in favour of the assessee, we find that the impugned order to the extent it is contrary to the law, as has been laid down by the Larger Bench, is liable to be set aside - Decided against Revenue.

Summary

Issues:
Whether the appellant is eligible for a refund of the amount paid in excess prior to 25.06.1999 for provisional assessment.

Analysis:
The appeals raised the question of whether the appellant, M/s Panasonic Battery India Co. Ltd, is entitled to a refund of the excess amount paid before 25.06.1999 for provisional assessment. The counsel for the appellant argued that a Larger Bench had ruled in favor of the assessee, stating that the doctrine of unjust enrichment would not apply to refunds related to finalizing provisional assessments before 25.06.1999. On the other hand, the Departmental Representative contended that the appellant had cleared goods under provisional assessment, allowing purchasers to avail CENVAT Credit, thus leading to unjust enrichment if a refund is granted. The Revenue did not invoke Section 11B of the Central Excise Act but sought the Bench's indulgence based on the possibility of purchasers availing the credit. The appellant clarified that goods were cleared to depots on provisional assessment and then to consumers via commercial invoices, providing reconciliation to lower authorities. The lower authorities sanctioned the refund but credited it to the consumer welfare fund due to unjust enrichment concerns.

The Bench rejected the preliminary point raised by the Departmental Representative, as the referral order only addressed the issue of unjust enrichment related to refunds from finalizing provisional assessments. The referral order specifically focused on the applicability of unjust enrichment introduced in Rule 9B(V) of the Central Excise Rules from 25.06.1999. The Larger Bench, in response to the reference, concluded that the doctrine of unjust enrichment would not apply to refunds from finalizing provisional assessments before 25.06.1999, when the relevant linking proviso was not in place. As the Larger Bench ruled in favor of the assessee, the impugned order conflicting with this ruling was set aside. Consequently, the appeals by M/s Panasonic Battery India Co. Ltd were allowed, and any consequential relief was granted, while the Revenue's appeals were rejected.