2018 (12) TMI 245 - AT - Central Excise

Refund of excess duty paid - provisional assessment was done - applicability of principles of unjust enrichment - Held that - This issue is no more res integra and has been settled by various decisions of the Tribunal wherein it has been consistently held that in a case of provisional assessment, doctrine of unjust enrichment is not applicable - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Unjust enrichment aspect in provisional assessment under Rule 7 of the CER 2002 for pneumatic tyres and other parts for the years 2015-16 and 2016-17.

Analysis:
The appeal challenged the order upholding the unjust enrichment aspect in the provisional assessment of duties for pneumatic tyres and other parts. The assessees had opted for provisional assessment under Rule 7 of the CER 2002 due to discounts confirmed after clearance. The adjudicating authority found that netting off excess and short-paid duties was not permissible due to unjust enrichment, as per Section 12B of the Central Excise Act. The excess duty was deemed to have been passed on to consumers, necessitating crediting to the Consumer Welfare Fund. The appellant contended that the impugned order was unsustainable, citing judicial precedents like the Karnataka High Court decision in Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE, LTU, Bangalore. The appellant's own case before the Tribunal had also ruled against unjust enrichment in provisional assessments.

The appellant argued that the test of unjust enrichment should apply even in cases of provisional assessment before granting refunds, referencing the Apex Court's decision in Addison and Company. However, the Tribunal found that various decisions had consistently held that in cases of provisional assessment, the doctrine of unjust enrichment did not apply. The Tribunal cited previous rulings, including the appellant's own case, where refunds were granted without considering unjust enrichment. The Tribunal emphasized that adjustments at the finalization of provisional assessments were permissible without testing for unjust enrichment.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal of the appellant based on the established precedents and the absence of unjust enrichment in provisional assessments. The Tribunal rejected the Revenue's appeals, following the decisions in the appellant's own case and other relevant precedents. The judgment highlighted that the facts in the present case were distinct from the Apex Court's decision in Addison and Company, as it pertained to adjustments in finalizing provisional assessments, not normal refunds. The Tribunal's decision was based on the consistent application of the law regarding unjust enrichment in provisional assessments.

This detailed analysis reflects the Tribunal's thorough consideration of the legal issues surrounding unjust enrichment in provisional assessments, drawing on relevant judicial precedents and legal provisions to arrive at a reasoned decision in favor of the appellant.