2021 (11) TMI 783 - AT - Central Excise

Refund of Excise Duty, paid under protest - goods are sold as waste and scrap - appellant submitted that since the goods are cleared as waste and scrap , they are not liable to pay duty - time limitation - principles of unjust enrichment - HELD THAT - The litigation with regard to the demand raised in the Show Cause Notice dated 06.08.2009 has continued till 27.02.2018 whereby the Commissioner (Appeals), Coimbatore has set aside the demand, interest and penalties confirmed in the Order-in-Original. Though after the first adjudication and consequent appeal (whereby the demand was set aside), the appellant ought to have filed the refund claim within a period of one year, since the Department has adjudicated the Show Cause Notice for a second time and confirmed the demand again, it cannot be said that the refund claim filed by the appellant is time-barred. The refund claim is filed within one month after passing of the second Order-in-Appeal which is dated 27.02.2018. The claim having been made within one year from the date on which the demand was set aside by the Commissioner (Appeals) finally, the rejection of refund claim as time-barred under Section 11B of the Central Excise Act, 1944 is not justified. Moreover, the amount having been paid as duty pursuant to the Show Cause Notice, the question of unjust enrichment does not arise. There are no hesitation to hold that the appellant is eligible for the refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for refund of duty and interest rejected by the Department; Duty on waste and scrap cleared by the appellant disputed; Appeal against Order-in-Original confirming duty demand; Refund claim rejected as time-barred and unjust enrichment not established.

Analysis:
The appellant, engaged in cement manufacturing, faced a dispute regarding the duty on worn-out machinery sold as waste and scrap. The Department demanded excise duty on such goods, leading to a Show Cause Notice in 2009. The appellant paid the duty under protest and the case was adjudicated twice, resulting in conflicting decisions. Initially, the demand was set aside in 2013, but later confirmed in 2017. The appellant's refund claim of ?10,18,495 was rejected in 2019 on grounds of being time-barred and unjust enrichment not proven.

Upon appeal, the Commissioner (Appeals) upheld the rejection, prompting the appellant to challenge the decision. During the hearing, the appellant argued that the payment made under protest should not be considered as duty, hence not subject to Section 11B restrictions. The appellant also contended that the incidence of duty passing on was baseless due to the payment being in response to the Show Cause Notice.

The Tribunal analyzed the case history and determined that the refund claim was not time-barred, as it was filed within one month of the second Order-in-Appeal in 2018. Considering the continuous litigation and conflicting decisions, the rejection based on Section 11B was deemed unjustified. Additionally, since the duty was paid in response to the Show Cause Notice, the question of unjust enrichment did not apply. Consequently, the Tribunal allowed the appeal, setting aside the rejection of the refund claim and granting consequential reliefs to the appellant as per the law.

In conclusion, the Tribunal found in favor of the appellant, ruling that they were eligible for the refund, overturning the decision of the Commissioner (Appeals) and providing relief to the appellant in this long-standing dispute.