Amnesty scheme coverage for pre-circular payments supports refund of excess Modvat reversal, with unsupported limitation and unjust enrichment objections rejected.

Payments made before the issuance of an amnesty circular were treated as within its coverage where the scheme extended to reversals of wrong Modvat credit and related interest, so excess payment remained refundable. The Tribunal also rejected limitation and unjust enrichment objections because they had not been raised in the show cause notice or addressed in the lower orders, and no factual foundation supported them in the proceedings. The appeal was allowed with consequential relief, and the refund was not denied on those grounds.

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Issues: (i) Whether payments made before the issuance of the circular were covered by the amnesty scheme and whether refund of excess payment was admissible; (ii) whether the refund claim was barred by limitation or hit by unjust enrichment.

Issue (i): Whether payments made before the issuance of the circular were covered by the amnesty scheme and whether refund of excess payment was admissible.

Analysis: The dispute arose from violation of Notification No. 203/92-C.E. and payments made towards wrong Modvat credit and interest under the amnesty arrangement. The governing scheme, reflected in the circular and public notice, applied to reversals made in respect of such violations. The reasoning adopted from the Supreme Court decision recognised that even reversals made before the scheme came into force were to be treated as covered by the scheme. The fact that the ineligible credit was worked out on input-output norms did not exclude coverage.

Conclusion: The payments made before the circular were covered by the scheme, and the excess amount was refundable. This issue was decided in favour of the assessee.

Issue (ii): Whether the refund claim was barred by limitation or hit by unjust enrichment.

Analysis: The objections of limitation and unjust enrichment were not raised in the show cause notice or dealt with in the orders of the lower authorities. The Tribunal treated both objections as requiring factual foundation specific to the case and found no basis to sustain them in the present proceedings.

Conclusion: The refund claim was not rejected on the grounds of limitation or unjust enrichment. This issue was decided in favour of the assessee.

Final Conclusion: The appeal was allowed with consequential relief, as the excess payment made under the amnesty framework was held refundable and the revenue's additional objections were negatived.

Ratio Decidendi: Payments made before the issuance of the amnesty circular can still fall within its coverage where the scheme recognises reversals of wrong Modvat credit, and refund cannot be denied on unsupported objections such as limitation or unjust enrichment raised for the first time without factual foundation.

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