2018 (6) TMI 888 - AT - Central Excise

Refund claim - provisional assessment - denial on the ground of unjust enrichment - whether unjust enrichment is applicable in the case of provisional assessment during the relevant period? - Held that - The duty paid is pertaining to the period December 1998. The same was paid on 05.06.1999. The assessment was provisional during the relevant period. There was no provision of unjust enrichment in the case of provisional assessment under Rule 9B. This express provision brought into the statute w.e.f 25.06.1999 by inserting the Sub-Rule (5) of Rule 9B of Central Excise Rules, 1944. Tribunal s Larger Bench in the case of Commissioner of Central Excise & Service Tax vs. M/s Panasonic Battery India Co Ltd, 2014 (4) TMI 576 - CESTAT AHMEDABAD has held that for the duty paid during the provisional assessment and consequential refund on finalization, the provision of unjust enrichment is not applicable before 25.06.1999. Unjust enrichment is not applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether unjust enrichment is applicable in the case of provisional assessment during the relevant period.

Analysis:
The appellant, engaged in the manufacture of Manmade fabrics under the Compound Levy Scheme, paid duty on galleries during provisional assessment from December 1998 to March 1999 and filed a refund claim. The Revenue rejected the claim citing unjust enrichment. The appellant argued that as the duty was paid during provisional assessment before the provision of unjust enrichment came into effect on 25.06.1999, it should not apply. They also contended that since duty was paid after goods clearance, the incidence did not pass to the buyer. The appellant relied on various judgments supporting their stance.

The Revenue, represented by the Additional Commissioner, reiterated the findings of the impugned order and highlighted that the issue of unjust enrichment during provisional assessment was not raised earlier by the appellant. They suggested sending the matter back to the original authority for consideration.

The Tribunal, after careful consideration, noted that the duty paid by the appellant pertained to December 1998, paid on 05.06.1999 during provisional assessment when there was no provision of unjust enrichment. The Tribunal referred to a Larger Bench judgment involving a similar issue and held that for duty paid during provisional assessment before 25.06.1999, unjust enrichment does not apply. Therefore, the Tribunal concluded that unjust enrichment was not applicable in the present case, setting aside the impugned order and allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that unjust enrichment did not apply to duty paid during provisional assessment before the relevant provision came into effect, as established by precedent.