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2014 (7) TMI 150 - AT - Central ExciseDenial of refund claim - refund of amount deposited during investigation when no SCN was issued - noticing the fact that, appellant had claimed Drawback as well as Cenvat Credit on the Inputs department asked the assessee to deposit the amount - assessee deposited ₹ 10 lakhs - no further action/activity was initiated against the assessee - Held that - Adjudicating Authority had rejected the refund claim only on the ground that the refund claim is hit by limitation. - there is nothing on record to indicate that the amount of ₹ 10 lacs paid by the appellant was an amount of duty. If the assessee deposits any amount during investigation, said amount unless on confirmation appropriated, cannot be considered as duty and the provisions of Section 11B of the Central Excise Act 1944 cannot be applied. - Following decision of Jalan Dyeing and Bleaching Mills 2011 (6) TMI 513 - CESTAT, MUMBAI refund allowed - Decided in favour of assessee.
Issues:
1. Refund claim rejection based on limitation. 2. Question of unjust enrichment. 3. Applicability of Cenvat Credit and duty Drawback. Analysis: Issue 1: Refund claim rejection based on limitation The appellant filed a refund claim for an amount of Rs. 10 lacs in May 2010, which was rejected by the Adjudicating Authority on the ground of being belated. However, the First Appellate Authority correctly discarded this finding as there was no indication that the amount deposited in April 2007 was considered as duty. The First Appellate Authority ruled that unless the amount deposited is confirmed as duty, the provisions of Section 11B of the Central Excise Act 1944 cannot be applied. Therefore, the rejection of the refund claim based on limitation was deemed incorrect. Issue 2: Question of unjust enrichment The Department Representative argued that the appellant cannot claim both duty Drawback and Cenvat Credit, and the amount deposited by the appellant was correctly retained by the revenue authorities. However, the Tribunal found that in cases where the amount deposited during investigation is not confirmed as duty, the doctrine of unjust enrichment does not apply. Judicial precedents, including the case of Sahakari Khand Udyog Mandal Ltd, were cited to support this view. The Tribunal emphasized that unless the amount deposited is confirmed as duty, the principle of unjust enrichment cannot be invoked. Issue 3: Applicability of Cenvat Credit and duty Drawback The appellant claimed that since the amount deposited was not appropriated and no Show Cause Notice was issued, it should not be considered as duty. The Tribunal referred to similar cases where the Tribunal and High Court upheld that amounts deposited during investigation cannot be treated as duty unless confirmed as such. The Tribunal also highlighted that the issue of unjust enrichment does not apply in cases where the amount deposited is not appropriated or confirmed as duty. Therefore, the appeal was allowed, and consequential relief was granted to the appellant based on the legal principles and precedents discussed. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the amount deposited by the appellant during investigation cannot be considered as duty unless confirmed as such, and the doctrine of unjust enrichment does not apply in such cases. The decision was based on legal interpretations, precedents, and the specific factual matrix of the case.
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