2021 (11) TMI 112 - AT - Central Excise

Effective Date of Central Excise Act Notifications: Impact on Refund Claims and Unjust Enrichment

The tribunal concluded that notifications under the Central Excise Act become effective from their publication date, not the date of issue, allowing the ... Revision of rates of excise duty of Motor Spirit (Petrol) and High Speed Diesel (HSD) upward - effective date of exemption notification - date of its issue or from the date of its publication in the official gazette as per Section 5A of the Central Excise Act, 1944 - when the sale price remained unchanged even after increase in the rate of duty and the price of the commodity was controlled by the government - principles of natural justice - Sub-section (5) of Section 5A of Central Excise Act, 1944 - HELD THAT:- It is clear that the notification No.22/2014 was published on 22nd November, 2014 and notification no. 24/2014 was published on 11th December, 2014 therefore, both the notifications will be effective from the date of its publication i.e.22nd November, 2014 & 11th December, 2014 respectively therefore, the contention of the lower authority that the notification will be effective from the date of its issue of notification is absolutely incorrect. Therefore, refund on this ground is admissible to the appellant. Principles of unjust enrichment - HELD THAT:- Since the same was not raised before the learned Commissioner (Appeals), no finding was given by the learned Commissioner (Appeals) and as requested by the appellant this issue needs to be reconsidered. The matter needs to be remanded to the adjudicating authority for passing a fresh order - Appeal is allowed by way of remand. Issues:1. Whether any exemption notification will come into force from the date of its issue or from the date of its publication in the official gazette as per Section 5A of the Central Excise Act, 1944.2. Whether the principle of unjust enrichment will apply when the sale price remained unchanged even after an increase in the rate of duty and the price of the commodity was controlled by the government.Analysis:Issue 1:The appellant contended that the two amending notifications enhancing duty rates were not issued for publication in the official gazette or offered for sale on the dates of issue, thus questioning the effectiveness of the notifications. The appellant relied on various judgments to support their argument. However, the tribunal examined Section 5A of the Central Excise Act, which states that a notification comes into force on the date of its issue for publication and sale. The tribunal reviewed the notifications and search gazettes by the Ministry, establishing that the notifications were published on later dates than their issue dates. Therefore, the tribunal concluded that the notifications would be effective from the date of their publication, not the date of issue, allowing the appellant's refund claim.Issue 2:Regarding the principle of unjust enrichment, the appellant argued that they did not pass on the burden of higher duty to buyers, as the selling price remained unchanged even after the duty rate increase. The tribunal noted that this argument was not raised before the lower authority, leading to no findings on this issue. The appellant requested a reconsideration of this aspect. The tribunal agreed that the issue of unjust enrichment needed further examination and remanded the matter to the adjudicating authority for a fresh decision. Consequently, the tribunal set aside the impugned order and allowed the appeal for remand to address the unjust enrichment issue.In conclusion, the tribunal's judgment clarified the effective date of notifications under the Central Excise Act and highlighted the importance of addressing the principle of unjust enrichment in excise duty matters. The case was remanded for a fresh decision on both issues, ensuring a comprehensive review of the appellant's claims.