2016 (12) TMI 1264 - AT - Central Excise

Refund - notification No.142/78 - principles of unjust-enrichment - Held that - the amount sought for refund was pre-deposit of revenue paid pending disposal of respondents petition before Hon ble High Court of Delhi - We further observed that the amount was credited to exchequer in 1986 and provisions for unjust-enrichment were enacted in 1991 without any retrospective effect - Appeal dismissed - decided in favor of the assessee.

Summary

Issues:
1. Appeal against Order-in-Appeal rejecting refund of Central Excise duty.
2. Grounds for rejecting refund - PLA credit and passing on duty incidence to customers.
3. Appeal filed by revenue challenging the decision of the Commissioner (Appeals).
4. Ground of appeal - respondent's failure to prove duty incidence not passed on to customers.

Analysis:
1. The appeal was filed by the revenue against the Order-in-Appeal rejecting the refund of Central Excise duty. The respondent had cleared 75000 tyres & tubes availing benefit of a notification but later informed the authorities that a show cause notice issued in 1980 was scrapped by the Delhi High Court in 2002. The respondent requested a refund of the amount deposited in 1986. The Original Authority rejected the refund citing reasons related to PLA credit and passing on duty incidence to customers. The Commissioner (Appeals) allowed the appeal, leading to the revenue's appeal before the Tribunal.

2. The main ground of appeal by the revenue was the respondent's failure to prove through their Balance Sheet that the duty incidence was not passed on to the customers. The revenue argued that the duty amount was paid during the pendency of a writ petition and was a pre-deposit, not duty paid at the time of clearance. The revenue contended that the principles of unjust enrichment should not apply in this case.

3. After hearing both parties, the Tribunal found that the amount sought for refund was a pre-deposit pending the disposal of the respondent's petition before the Delhi High Court and was not paid as duty at the time of clearance. The Tribunal observed that the principles of unjust enrichment were not applicable to such a deposit made in 1986, before the enactment of provisions for unjust enrichment in 1991 without retrospective effect. Therefore, the Tribunal dismissed the revenue's appeal, stating that the respondents were eligible for consequential relief as per law.