2009 (8) TMI 208 - AT - Central Excise

Appeal allowed for reassessment based on Supreme Court judgment, emphasizing provisional assessments in refund claims.

The Tribunal allowed the appeal by way of remand, directing the Original Authority to finalize the assessment based on the Supreme Court's judgment, ... Eligibility to refund of the amount claimed by the appellant from the angle of unjust enrichment - Tribunal vide earlier order had held that the entire claim was in time as the assessment of the goods manufactured by the appellant during the material period was provisional. - the vice of unjust enrichment would not be attracted in cases of refund of excess duty paid, determined following finalisation of provisional assessment prior to 25-6-1999, when Sub-rule 5 of rule 9B of Central Excise rules 1944 came into force. As it is submitted that the assessments remain provisional even today, we remand the matter to the Original Authority to finalise the assessment and decide the issue in terms of the Apex Court’s judgment in the case of CCE Chennai v. TVS Suzuki Ltd., 2003 (156) E.L.T. 161 (S.C.) Issues:Claim for refund based on exemption under Notification No. 217/86 - Eligibility for exemption under unjust enrichment - Finalization of provisional assessment orders prior to 25-6-1999.Analysis:The case involved the appellant, a manufacturer of kraft paper, who initially paid duty for packing paper and paper products manufactured in their factory between 7-3-81 to 17-1-92. Subsequently, they sought a refund of the duty paid, claiming that clearances of kraft paper captively consumed were eligible for exemption under Notification No. 217/86 dated 1-3-1986. The claim for refund was partially allowed due to a limitation issue, with the Commissioner (Appeals) upholding the decision. The Tribunal, in a previous order, determined that the entire claim was within the time limit as the goods' assessment during the relevant period was provisional. However, the matter of unjust enrichment was left for further examination by the authorities.The appellant relied on the Supreme Court's judgment in the case of CCE Chennai v. TVS Suzuki Ltd., 2003, to support their argument that the claim did not need to pass the unjust enrichment test. The Apex Court's ruling in the TVS Suzuki case stated that restrictions on refund claims due to finalization of provisional assessment orders did not apply before 25-6-1999. Therefore, the unjust enrichment issue would not be applicable to refund claims resulting from finalization of provisional assessments before that date. Since the assessments in this case were claimed to be provisional even at present, the matter was remanded to the Original Authority for final assessment based on the Supreme Court's judgment. The appellant was granted an opportunity for a fair hearing, and the Original Authority was directed to resolve the matter promptly, ideally within three months from the date of the order.In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the need for the Original Authority to finalize the assessment and make a decision considering the Supreme Court's judgment. The case highlighted the significance of provisional assessments and their impact on refund claims, particularly in relation to the unjust enrichment principle.