2015 (9) TMI 1080 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Provisional assessment - Bar of limitation - Held that - refund claim is in respect of the clearances made during the period from 10.04.01 to 21.05.2001. However, it is not in dispute that the excess duty paid whose refund has sought had been paid on 19.04.2001, 30.04.2001 and 15.05.2001. The Assistant Commissioner has taken the date of clearance as the relevant date under section 11 B for counting the limitation period of one year and on this basis has held that the refund claim filed on 16.04.2002 is barred by limitation. However, in terms of definition of the term relevant date in section 11 B, in the present case the relevant date would be the date of payment of duty. Since the excess duty paid whose refund has sought had been paid on 19.04.2001, 30.04.2001 and 15.05.2001, in our view, the refund claim of the duties filed on 16.04.2002 would be within limitation period. Respondents plea is that though the duty initially had been paid on final price which was higher than the final price, the duty reimbursement received by them from the HPCL was only of the duty payable on the final price and not of the duty paid on the provisional price which was higher. If this is so, the bar of unjust enrichment would not apply. Just because the prices were not finalized by the respondents customers within 3 to 4 months, the assessment cannot be treated as provisional, and, therefore, the limitation period prescribed under section 11B would be applicable for filing of the refund claim. Therefore, this refund claim had been correctly rejected as hit by limitation by the Assistant Commissioner and the Commissioner (Appeals) order holding that the same is not time barred is not correct. - Decided partly in favour of Revenue.

Issues Involved:

1. Provisional Assessment and Refund Claims
2. Limitation Period for Filing Refund Claims
3. Applicability of Unjust Enrichment

Detailed Analysis:

1. Provisional Assessment and Refund Claims:

The respondents, manufacturers of LPG cylinders, supplied these to HPCL under provisional prices, which were later finalized. They did not apply for provisional assessment under Rule 9B of the Central Excise Rules, 1944, nor were any orders passed for the same. The Assistant Commissioner had previously finalized provisional assessments for the period from April 1997 to March 1998 based on the respondents' undertaking to provide final prices within 3 to 4 months and pay any differential duty. However, for the periods July 1999 to October 2000 and April 2001 to May 2001, the final prices were not fixed within the stipulated time, leading to refund claims when the final prices were lower than the provisional prices. The Assistant Commissioner rejected these claims as time-barred. The Commissioner (Appeals) later allowed the appeals, treating the assessments as provisional and not hit by the bar of unjust enrichment.

2. Limitation Period for Filing Refund Claims:

The Tribunal remanded the case to the Commissioner (Appeals) to examine whether there was any specific provisional assessment order under Rule 9B and to consider the unjust enrichment issue in light of the Apex Court's judgment in CCE, Mumbai-II Vs. Allied Photographics India Ltd. The Commissioner (Appeals) in denovo proceedings again allowed the appeals. The Revenue contended that without a specific provisional assessment order, the clearances could not be treated as provisional, and the limitation period under section 11B of the Central Excise Act would apply. The Tribunal agreed with the Revenue for the refund claim of Rs. 12,67,122/- for the period July 1999 to October 2000, stating that the absence of a provisional assessment order meant the claim was time-barred. However, for the refund claim of Rs. 3,93,783/- for the period April 2001 to May 2001, the Tribunal held that the relevant date for the limitation period was the date of payment of duty, not the date of clearance, making the claim within the limitation period.

3. Applicability of Unjust Enrichment:

The respondents argued that they were not reimbursed the excess duty paid, thus the bar of unjust enrichment did not apply. The Tribunal concurred, noting that the duty reimbursement from HPCL was based on the final prices, not the provisional higher prices. Therefore, the excess duty had not been passed on to the customers. The Tribunal cited the case of CCE, Jaipur vs. Universal Cylinder, affirmed by the Apex Court, where it was held that the bar of unjust enrichment would not apply in such circumstances.

Conclusion:

The Tribunal allowed the Revenue's appeal regarding the refund claim of Rs. 12,67,122/-, setting aside the Commissioner (Appeals)'s order and restoring the Assistant Commissioner's order, which had rejected the claim as time-barred. However, the Tribunal dismissed the Revenue's appeal concerning the refund claim of Rs. 3,93,783/-, upholding the Commissioner (Appeals)'s order that the claim was within the limitation period and not hit by unjust enrichment.

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