2018 (6) TMI 174 - AT - Central Excise

Tribunal: No Unjust Enrichment Test for Excess Duty Refunds

The Tribunal held that in cases of finalization of provisional assessments, adjustments for excess duty paid do not necessitate the test of unjust ... Refund of excess Excise duty paid - unjust enrichment - finalization of provisional assessment - Section 11B of the Central Excise Act - Revenue has argued that even in the case of provisional assessment finalization, refund can be granted only subject to the test of unjust enrichment. Held that:- An identical issue came up before the Tribunal in the case of Indian Telephone Industries [2016 (11) TMI 14 - CESTAT BANGALORE] where it was held that adjustments at the time of finalization of provisional assessments would be permissible without putting the excess duty paid to the test of unjust enrichment - refund allowed - appeal dismissed - decided against Revenue. Issues:- Whether the test of unjust enrichment is required before granting a refund in cases of provisional assessment.- Whether adjustments at the time of finalization of provisional assessments can be made without subjecting the excess duty paid to the test of unjust enrichment.Analysis:1. The appeals were filed by Revenue against various orders-in-appeal concerning refund claims for excess duty paid during provisional assessments. The Revenue contended that the refund claims were granted without considering the aspect of unjust enrichment, which should be a prerequisite before granting refunds.2. The Revenue argued that even in cases of provisional assessment, the test of unjust enrichment, as per Section 11B of the Central Excise Act, should be conducted before granting refunds. Citing the decision in the case of Addison and Company, the Revenue emphasized that refunds should only be allowed if the burden of duty has not been passed on to any other person.3. The respondent's counsel countered the Revenue's argument by referring to previous decisions, including the case of Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE, LTU, Bangalore, which held that in the case of provisional assessments, the test of unjust enrichment is not mandatory before adjusting excess duty paid.4. After hearing both sides, it was observed that the refunds in question had been granted by the original authority and upheld by the Commissioner (Appeals). The Revenue's sole contention was the lack of consideration for unjust enrichment. The Tribunal referred to a similar case involving Indian Telephone Industries and upheld the decision that adjustments during finalization of provisional assessments do not require the test of unjust enrichment.5. The Tribunal further referenced a decision involving Hindustan Zinc Ltd., where it was held that excess duty paid during provisional assessments can be adjusted without unjust enrichment verification. The Tribunal found no merit in the Revenue's appeals and dismissed them based on the precedent set in previous cases.6. The Tribunal distinguished the facts of the present case from the Addison and Company case cited by Revenue, emphasizing that the situation involved adjustments during finalization of provisional assessments, not a normal refund scenario. Ultimately, the Tribunal upheld the impugned orders, following the precedent set in previous decisions, and dismissed all appeals filed by Revenue.7. The judgment was pronounced on 11/04/2018, affirming that adjustments during finalization of provisional assessments do not require the test of unjust enrichment, based on established legal interpretations and precedents.