2014 (6) TMI 516 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Closure of 1 unit - Certificate surrendered - Held that - when a unit has been closed in the year 2006 and there is no activity going on, if any payment is made in that account, the question of bar of unjust enrichment does not arise at all. Both the lower authorities have not examined the provisions of law. They merely relied on the decision of Sahakari Khand Udyog Mandal Ltd. - 2005 (3) TMI 116 - SUPREME COURT OF INDIA . In fact, in this case the facts of Sahakari Khand Udyog Mandal Ltd. are not relevant at all. In the present case the duty has been paid wrongly in the PLA of a closed down unit which was not required to be paid, therefore bar of unjust enrichment is not applicable - The adjudicating authority is directed to sanction the refund claim within 7 days of receipt of order - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant appealed against the rejection of their refund claim due to alleged unjust enrichment. The case involved two units, one operational and one closed down. The appellant mistakenly paid Central Excise duty from the closed unit's account instead of the operational unit's account. Upon realizing the error, they promptly rectified it by depositing the amount in the correct account. The lower authorities rejected the refund claim citing unjust enrichment without properly examining the relevant legal provisions. The tribunal noted that in a scenario where a unit is non-operational and closed, the concept of unjust enrichment does not apply. The lower authorities erred in their reliance on a previous decision that was not applicable to the current case. The tribunal set aside the impugned order, allowing the appeal with consequential relief. The adjudicating authority was directed to process the refund claim promptly within 7 days of receiving the tribunal's order.