Commissioner of Central Excise Commissionerate Vs Goetze India Ltd.

Adarsh Kumar Goel, J.@mdashThis appeal has been preferred by the revenue u/s 35G of the Central Excise Act, 1944 (for short "the Act") against order dated 10.5.2010 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi claiming following substantial questions of law:

i) Whether after taking into consideration of the facts stated above, the order of the Hon''ble Tribunal, New Delhi is legally correct and proper in holding that the bar of unjust enrichment is not applicable since the party had paid duty under protest consequent upon finalization of provisional assessments?

ii) Whether the CESTAT, New Delhi failed to appreciate the factor of unjust enrichment as laid out by the Hon''ble Apex Court in the case of Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd., and has accordingly passed an erroneous order?

3. The Assessee is registered under the provisions of the Central Excise Act, 1944. It paid duty on the basis of provisional assessment. The claim of the Assessee for trade discount was not fully accepted at the time of approval of price. As a result of final assessment order, the Assessee became entitled to refund. Accordingly the Assessee made the claim for refund in terms of order of the Tribunal dated 21.8.1998. The claim was upheld by the Assistant Commissioner, Central Excise Division, Patiala vide order dated 11.2.2001 which was finally upheld by the Appellate Authority vide order dated 5.2.2008. It was held that no unjust enrichment was involved. In the order of the Adjudicating Authority dated 3.8.2007 (i.e. after remand), following observations were made on the factual aspect:

The notice debited an amount of Rs. 1,19,239/- under protest from their RG-23A Pt-II. As this amount of Rs. 1,19,239/- was debited during the year 1996 for the clearances made during the period from July, 1987 to March, 1989, I do not find it believable that a stockiest will pay differential amount of duty after about 8-9 years.

4. The above view was upheld by the appellate authority. It was observed:

The facts on record indicate that provisional assessment was involved in instant case. The Adjudicating Authority has recorded this finding in the impugned order and the department in their grounds of appeal also confirm that the refund had accrued as a result of finalization of the assessments. Under the circumstances, it was held by the Hon''ble Supreme Court in the case of Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd., that the doctrine of unjust enrichment is not applicable since the duty paid under protest was consequent upon finalization of provisional assessment. The Adjudicating Authority has correctly placed reliance upon this judgment while allowing the refund claim. I, therefore, do not find any reason to interfere with the order of the Adjudicating Authority which is accordingly upheld.

5. The above view has been approved by the Tribunal.

6. We have heard learned Counsel for the Appellant.

7. Learned Counsel for the revenue submits that bar of unjust enrichment u/s 11B was applicable as it was not a case of refund on final assessment in respect of excess payment made under Rule 9B of the Central Excise Rules, 1944.

8. We are unable to accept the submission. The finding extracted above clearly shows that refund became due on account of excess payment made at the time of provisional assessment. Moreover, in the present case there could be no question of unjust enrichment as the Assessee had allowed discount which entitled it to pay lesser duty. In Commissioner of Central Excise, Mumbai-II Vs. Allied Photographics India Ltd., , Hon''ble Supreme Court explained the difference in situation where refund was covered by Section 11B of the Act and in situation where refund became due as a result of payment as per provisional assessment which may be held to in excess at the time of final assessment under Rule 9B(5). As rightly held by the Tribunal that the present case was governed by the observations in para 14 of the judgment in M/s Allied Photographics Ltd. and the Assessee became entitled to refund on account of excess duty paid as per order of final assessment. No substantial question of law arises.

9. Accordingly, the appeal is dismissed.