Tax Tribunal orders refund of Rs.6,27,728 with interest. Deposits during investigation not unjust enrichment.

The Tribunal allowed the appeal, directing the Department to refund the entire amount of Rs.6,27,728/- along with interest within two months from the receipt of the order. The Tribunal set aside the order under challenge and upheld the directions of the Commissioner (Appeals), emphasizing that amounts deposited during investigation are under protest and not subject to unjust enrichment. The Tribunal also clarified that the Commissioner (Appeals) does not have the statutory power to remand a case under Section 35A.

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Issues Involved:
1. Refund claim of Rs.6,27,728/- deposited during investigation.
2. Applicability of the unjust enrichment clause.
3. Invocation of Section 11B of the Central Excise Act, 1944.
4. Power of remand by Commissioner (Appeals).

Detailed Analysis:

1. Refund Claim of Rs.6,27,728/- Deposited During Investigation:
The appellants, engaged in the manufacture of plastic bottles, initially faced a Central Excise Duty demand of Rs.17,97,986/- for the period 2009-2011. After depositing Rs.6,27,728/- as a pre-deposit, the demand was set aside by the Tribunal on 20.11.2018, leading the appellants to file a refund claim for the same amount. The Original Adjudicating Authority sanctioned only Rs.1,79,799/- and rejected the remaining Rs.4,47,929/-. However, the Commissioner (Appeals) allowed the refund of the remaining amount along with interest, which was complied with by the Adjudicating Authority. Subsequently, the Principal Commissioner reviewed the order, invoking Section 12B of the Central Excise Act, 1944, questioning the unjust enrichment clause, leading to the Department's appeal and remand by the Commissioner (Appeals).

2. Applicability of the Unjust Enrichment Clause:
The appellant argued that the amount deposited during the investigation should be considered as under protest, and thus, the unjust enrichment clause should not apply. The Tribunal noted that the demand pertained to the period 2009-2011, with the deposit made in 2016, making it impossible for the burden of the amount to be passed on to customers. The Tribunal referenced multiple case laws, including CCE, Lucknow vs. Eveready Industries India Ltd. and CCE, Coimbatore vs. Pricol Ltd., which supported the view that amounts deposited during investigation are under protest and not subject to unjust enrichment.

3. Invocation of Section 11B of the Central Excise Act, 1944:
The Tribunal observed that the amount deposited during the investigation is not considered duty but a deposit under protest. Therefore, the time limit under Section 11B does not apply. This position was supported by precedents such as the Hon'ble High Court of Madras in CCE, Coimbatore vs. Pricol Ltd. and the Hon'ble High Court of Delhi in Team HR Services Pvt. Ltd. vs. Union of India. The Tribunal concluded that the entire amount of Rs.6,27,728/- should be refunded along with interest, as ordered by the Commissioner (Appeals) on 16.07.2019.

4. Power of Remand by Commissioner (Appeals):
The Tribunal noted that under Section 35A, the Commissioner (Appeals) does not have the statutory power to remand a case. The Commissioner (Appeals) can only confirm, modify, or annul the decision appealed against. Therefore, the order of remand by the Commissioner (Appeals) was deemed unsustainable.

Conclusion:
The Tribunal set aside the order under challenge, directing the Department to comply with the Order-in-Appeal dated 16.07.2019, refunding the entire amount of Rs.6,27,728/- along with interest within two months from the receipt of the order. The appeal was allowed, and the directions of the Commissioner (Appeals) were upheld.

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