TaxTMI 
TaxTMI 
1995 (7) TMI 194
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.... duty burden has already been passed on by the appellants to the consumers and the refund granted would cause unjust enrichment to them. The appellants resisted the notice by citing various case laws submitting that there is no provision in the statute for denial of refund on this ground and it is not open to review the refund sanctioned, without resorting to appellate proceedings under Section 35E of the Central Excise Act. It is also pertinent to mention that the appellant never rebutted the allegation that they have passed on the duty burden to the consumer nor is it their contention that they have passed on the benefit of refund to the consumer. Their challenge to the proceedings is mainly on the ground that law, during the material period, does not allow such an issue to be raised for denial of refund. It was also pleaded that the demand is time-barred being beyond six months from the date of sanction of refund. The said contentions were rejected by the Assistant Collector, relying on the amended provisions of the Central Excise Act governing refunds. On appeal before the Collector (Appeals), their appeal was rejected, by placing reliance on the decision of the Supreme Court i....
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....l was still pending, where the amended provision came into operation the Supreme Court applied the amended provisions. In the present case covered by this appeal, refund has already been sanctioned and even cheque has been issued before the amended provision. Hence this is not a case of pending application for refund, where amended provision can be applied in terms of the above judgment. If it is construed that the amended provision of Section 11D can be invoked, even in cases, where refunds have been granted in the past, all such sanctioned refunds can be re-opened for this purpose. 4. Shri K.P. Misra, the ld. SDR contended as below : (i) Relevant date for issue of demand under Section 11A in the case of erroneous refund is the date of refund, which means the date on which the cheque was issued and not the date of preparation of cheque or the date of ordering sanction. This position is now settled in the various decisions. Hence refund sanctioned erroneously in this case without looking into the question of unjust enrichment has been demanded back well within the period of limitation prescribed under Section 11A. (ii) In view of the above position, refund sancti....
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....f taking credit in PLA is the relevant date and where refund voucher is issued, the relevant date is the date of issue of voucher (vide the decisions in the case of C. C. Ex. v. Cawnpore Sugar Works - 1989 (39) E.L.T. 59 (Tri.) - I am to hold that the relevant date in the case is the date on which the cheque was issued (despatched). Hence going by this date, demand is within six months as contended by ld. S.D.R. Since it is held that SCN has been issued within six months for recovery of erroneous refund as per Section 11A, it is immaterial whether review under Section 35E has been initiated or not. It is a settled law that Section 11A and 11B are independent provisions containing self-contained provisions for recovery of short levy of duty or erroneous refund or for grant of refund of excess duty paid as the case may be. Hence review of the refund order is not called for under Section 35E, as pleaded by the ld. Counsel. 6.2 In the paper book filed, there is a reference to the decision of the judgment of the Rajasthan High Court in the case of Adarsh Metal Corpn. - 1993 (67) E.L.T. 483 (Raj.). In this judgment Rajasthan High Court have held that in the case of refund arising....
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....ed within the parameters of Section 11A, refund originally sanctioned cannot be said to have acquired finality. 6.4 Next issue to be considered is the applicability of the Supreme Court judgments in Jain Spinners and U.O.I. v. ITC Ltd. Taking up the case of Jain Spinners, I find that in this case, the disputed amount of duty, deposited in the High Court as per the interim order of the Court, was permitted withdrawal by the department by the High Court, on condition that it will be returned with interest, in case Jain Spinners succeeded in the Writ Petition. During the pendency of W.P., appeal filed before the Collector (Appeals) was allowed in their favour. Hence they filed a claim before the Assistant Collector for refund, apart from moving the High Court for disposing of the W.P. with direction to refund the amount deposited by them and withdrawn by the department with an undertaking to refund. This application was allowed by the High Court and the said order was challenged by the department before Supreme Court, on the ground of unjust enrichment inviting attention to the amended provisions of Section 11B. The Apex Court took note of the following factors and held as bel....
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.... the amount, in case the Government succeeds in Special leave petition. On 15-4-1993 when the case came for hearing before the Apex Court, the Govt. Counsel pointed out the amended provisions of law and submitted the benefit of refund would unjustly enrich the ITC since the duty incidence has already been passed on to the consumer. However, the plea of the Govt. was resisted by ITC that this is a new ground taken for the first time and the amended provisions were not in force, even when the appeal was filed by the Government before the Apex Court and hence cannot be raised. The Supreme Court in paras 11 and 12 of their judgment rejected the objection of ITC pointing out certain averments in the affidavits filed by the Government in their memo of appeal and stay application against the High Court judgment. The relevant paras 11 and 12 of the judgment of the Supreme Court are reproduced below : 11. Let us first deal with the objection raised on behalf of the respondent that the plea based on Section 11B cannot be permitted to be taken during the hearing of the appeal for the first time. Indeed the respondent is right in contending that the plea of "unjust enrichment" had not ....
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....dent to rebut the presumption which can be raised under Section 12B of the Act. The objection raised by the respondent, thus, has no force on merit." 6.7 From the above observations of the Supreme Court, I find that the ground of unjust enrichment based on amended provisions of law is a point of law which can be agitated, when the new statute has come into being during the pendency of an appeal to do complete justice to both the parties, especially when there are averments to this effect in the affidavits filed by the Govt. 6.8 In the para 15 of the judgment, the Apex Court does not agree with the arguments of the Counsel for ITC that the amended provision can be applied only prospectively and the prohibition contained therein cannot be applied to their case where appeal is pending. The relevant portions in para 15 of the Apex Court judgment are reproduced below : 15. It is, thus, seen that under Section 11B(3) (supra) no refund shall be made except as provided for in sub-section (2), as amended, notwithstanding anything to the contrary contained in any judgment, order or direction of the Appellate Tribunal or any court or in any other provisions of the Act or th....
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....to the contrary is not only spacious but also fallacious. The Apex Court, while taking this view also relied on their previous decision in Jain Spinners case. 6.8A In para 17 of this judgment, the Apex Court also rejected the contention that refund has already been concluded by way of sanction holding that refund was granted only as per this interim order of the Apex Court during the pendency of this appeal against High Court judgment. The order of the Delhi High Court challenged has not acquired finality, when the amended provision came into force. 6.9 Thus on a careful and close reading of the above paras, it appears that even if refund has been granted, which is sought to be agitated by way of appeal, such a refund cannot be construed to have acquired finality. If during the pendency of the appeal proceedings, the amended provisions have come into force, they cannot be ignored. 7. Thus, I find that the ratio of the judgment of the Supreme Court would be applicable in this case. In the present appeal, refund though sanctioned by the Assistant Collector, is sought to be recovered as one erroneously refunded on the ground of unjust enrichment and such a c....