2018 (4) TMI 472 - AT - Central Excise

Refund claim - unjust enrichment - case of Revenue is that the ground of unjust enrichment having not been considered by the First Appellate Authority in it is correct prospective - Held that - the First Appellate Authority has come to a correct conclusion as to satisfaction of unjust enrichment by the respondent herein - the Chartered Accountant has categorically stated that the respondent (assessee) has been carrying on an amount of ₹ 6,80,974/- in the balance sheet under the excise duty receivable - the First Appellate Authority was correct in holding that the respondent herein has satisfied the condition of there is no unjust enrichment - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claim rejection based on unjust enrichment and limitation under Sec. 11B(2) of CE Act, 1944.

Analysis:
The appeal was filed by Revenue against the rejection of a refund claim of ?6,80,974 by the Adjudicating Authority, which was later allowed by the First Appellate Authority. The case involved the appellants seeking a refund consequent to a favorable decision by the Hon'ble Commissioner (Appeals). The issue revolved around the irregular CENVAT credit availed by the appellants, leading to a duty demand of ?29,20,709. The subsequent appeal to the forum resulted in setting aside the duty demand, prompting the refund claim. However, a show cause notice was issued proposing rejection of the refund claim on the grounds of unjust enrichment and limitation under Sec. 11B(2) of the CE Act, 1944. The rejection was based on the appellants' failure to prove unjust enrichment with relevant evidence and the absence of a recorded claim 'under protest' with the department. This rejection led to the appeal at hand.

The First Appellate Authority allowed the appeal and directed the refund, leading to the Revenue challenging the decision primarily on the grounds of unjust enrichment. The Departmental Representative argued that the provisions of Section 11B(2) should apply, emphasizing the necessity to prove unjust enrichment even with a Chartered Accountant Certificate. Reference was made to a judgment highlighting the applicability of unjust enrichment principles to all refund cases. However, the Tribunal found that the First Appellate Authority correctly considered the unjust enrichment aspect, as evidenced by the Chartered Accountant's Certificate indicating the amount as "excise duty receivable" in the balance sheet. The Tribunal concluded that the respondent had satisfied the condition of no unjust enrichment, thereby upholding the impugned order and rejecting the appeal.

In summary, the judgment focused on the rejection of a refund claim based on unjust enrichment and limitation grounds under the CE Act, 1944. The Tribunal upheld the decision of the First Appellate Authority, emphasizing the satisfaction of unjust enrichment conditions by the respondent, as supported by the Chartered Accountant's Certificate. The appeal was dismissed, affirming the correctness and legality of the impugned order.