2005 (2) TMI 343 - AT - Central Excise

Appellate Tribunal allows refund claim for chemical and fertilizer manufacturers, rejects unjust enrichment argument

The Appellate Tribunal overturned previous decisions, ruling that the refund claim of Rs. 14,11,605 by chemical and fertilizer manufacturers was not ... Refund - Limitation - Unjust enrichment Issues involved: The judgment addresses the issues of whether the assessees' claim for refund of Rs. 14,11,605/- is time-barred and whether it is affected by the doctrine of unjust enrichment.Refund Claim and Limitation: The appellants, engaged in manufacturing chemicals and fertilizers, faced a demand for duty payment on Ammonia usage. After various legal proceedings, a refund claim was filed on 15-3-1988, rejected on grounds of limitation and unjust enrichment. The Tribunal, considering Section 35F of Central Excise Act, ruled the claim was not time-barred as duty was paid pending appeal before the Commissioner (Appeals).Unjust Enrichment: The Commissioner (Appeals) relied on the Solar Pesticides case, but the Tribunal found it inapplicable. The issue was whether unjust enrichment applies when duty is paid after goods clearance (April and May 1986 vs. duty paid in November 1986). Citing the Gwalior Oil Mills case, the Tribunal held that the presumption of duty passing on to the buyer does not apply when duty is paid post-clearance, thus rejecting the unjust enrichment argument.Appellate Tribunal Decision: The Tribunal set aside the earlier orders, allowing the appeals based on the findings that the refund claim was not time-barred and was not affected by the doctrine of unjust enrichment. The decision was pronounced in court, overturning the previous rulings and granting relief to the appellants.