2020 (3) TMI 832 - AT - Central Excise

Refund of MOT Charges - principles of unjust enrichment - Section 11B of Central Excise Act, 1944 - HELD THAT - Though the refund is made under Section 11B, the said section provides for refunds of duty and interest whereas, in the present case, the refund is for MOT charges, therefore provisions of Section 11B will not apply. Consequently, the provisions of unjust-enrichment is also not applicable. In a similar case, where refund was in respect of not duty or interest but for differential penalty, this Tribunal in the case of M/S INDICON COPIER SERVICES VERSUS COMMISSIONER OF CUSTOMS (EXPORTS) , CHENNAI 2016 (3) TMI 606 - CESTAT CHENNAI held that section for providing refund deals with only duty and interest element, therefore, it was held that unjust-enrichment is not applicable. The ratio of this judgment is applicable in the present case. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant's refund claim of MOT Charges is subject to unjust enrichment under Section 11B of Central Excise Act, 1944.

Analysis:
The appellant contended that unjust enrichment under Section 11B applies only to duty and interest refunds, not to MOT charges. Citing the case of Indicon Copier Services vs. Commissioner of Customs, the appellant argued that unjust enrichment does not apply in this case. On the other hand, the Revenue, represented by the Superintendent (AR), relied on the judgment in Mafatlal Industries Limited vs. UOI to support their position.

Upon review, the Tribunal found that the refund in question pertained to MOT charges, not duty or interest, thus Section 11B did not apply. Referring to the case of Indicon Copier Services, the Tribunal emphasized that the section for providing refunds deals only with duty and interest elements, hence unjust enrichment was deemed inapplicable in this scenario.

Regarding the judgment in Mafatlal Industries Limited, the Tribunal distinguished it from the present case. The Mafatlal Industries case concerned the sale price of sugar, charged at the time of goods sale, unlike the MOT charges here, which are incurred for export goods supervision and not charged to buyers. Consequently, the Tribunal found the Mafatlal Industries judgment not directly relevant to the current situation.

Based on the above analysis, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant. The decision was pronounced in open court by the Tribunal members.