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2020 (1) TMI 1654 - MADRAS HIGH COURTRefund claim - payment of duty on Equalized Freight charges - period between 01.06.1972 and 15.03.1976 - principle of unjust enrichment - HELD THAT:- As regards the liability to duty itself, the petitioner has admittedly remitted the duty in time, under protest, and succeeded in the claim as early as in 1989. Thereafter, it was at the instance of revenue that the matter travelled through the appellate hierarchy on the issue of whether the amendment to Section 11B of the stood attracted to the case of the petitioner or not. Section 11B was amended with effect from 20.09.1991. Post amendment, the Section provided for the test of unjust enrichment to be satisfied by the assessee. Thus, only where the Officer was of the view that the duty had not been collected from the person claiming refund or the instance of such duty had not been passed on by him could the refund be sanctioned. In Mafatlal [1996 (12) TMI 50 - SUPREME COURT], the provision was held to be constitutionally valid, operating only prospectively. Thus, the test of unjust enrichment was held to apply only to those applications for refund filed prior to the date of amendment that were yet pending. In the petitioners' case, the applications had been accepted by the CEGAT even prior to the date of amendment to Section 11B. The order is dated 06.06.1989, prior to amendment to Section 11B of the Act bringing into play the concept of unjust enrichment. With the appeal coming to be allowed, the refund became automatic, as a necessary incident of success in appeal. The subsequent litigation was on the question of whether there was unjust enrichment in the hands of the petitioner - the impugned order applying the provisions of Section 11BB to the facts and circumstances of this case, and granting statutory interest only for the period 26.08.1995 to 23.02.2004 does not take into account the facts and circumstances in proper perspective, either factually or legally. The entitlement of the petitioner, though termed ‘interest’, would really fall within the realm of ‘compensation’ as it cannot be denied that the petitioner has been deprived of a substantial amount of capital from 1989 onwards till date and till date of payment - the petitioner in this case is clearly entitled to compensation for the loss of capital from the date of success in its appeal before the CEGAT, being 06.06.1989 as well as compensation on the delay on payment of interest as claimed. The petitioner is entitled to interest at the rate of 9% from 06.06.1989 till 25.08.1995 on the amount of refund and thereafter at the rates specified in Notifications of the Central Board of Excise and Customs in i) Notification No.41/2000-(N.T.), ii) Notification No.24/2001- Central Excise (N.T.) Dt.11/05/2001 (F.No.B-10/1/2001-TRU), iii) Notification No.17/2002- CE(N.T.) Dt.13/05/2002 (F.No.B-10/3/2002-TRU) and iv) Notification No.67/2003- CE (N.T.) Dt. 12/09/2003 (F.No.04/07/2003 CX.I) and interest at the rate of 6% till date of payment, to be paid over to it within a period of six (6) weeks from date of receipt of a copy of this order. Petition allowed.
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