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2010 (11) TMI 233 - HC - Central ExciseRefund - Whether the issue involved in the instant CEGAT order was not a case of pending proceedings and appropriately falls under the ambit of proviso I of Section 11B meriting considering of unjust enrichment brought about in law - The application for refund was made by the assessee on 19.10.1995, even though in earlier round, application held to be time barred by authorities was held to be in time by this Court - After the amendment, refund could not be allowed without considering the bar of unjust enrichment - All pending matters shall, however, be governed by the law declared herein notwithstanding that the tax or duty has been refunded pending those proceedings, whether under the orders of any authority, Tribunal or Court or otherwise - Decided against the assessee
Issues:
1. Interpretation of Section 11B of the Central Excise Act, 1944 regarding unjust enrichment in refund cases. Analysis: The case involved a dispute regarding the application of Section 11B of the Central Excise Act, 1944, specifically in relation to the doctrine of unjust enrichment in refund cases. The primary issue was whether the amendment introduced by Sections 11B and 12B on 20.9.1991 applied to pending applications for refund. The assessee had applied for a refund, which was initially rejected on the grounds of unjust enrichment. However, the Tribunal later upheld the claim for refund, leading to a conflict in interpretation. The Court considered the timeline of events, noting that the application for refund was made by the assessee on 19.10.1995, after the introduction of the amendment on 20.9.1991. The revenue argued that the amendment should apply to pending applications, and the bar of unjust enrichment was applicable in this case. Reference was made to the decision in Mafatlal Industries Ltd. v. Union of India, emphasizing the importance of considering unjust enrichment in refund matters. The Court highlighted the observations in Mafatlal Industries Ltd., particularly regarding the application of Section 11B to pending proceedings, even if the duty had been refunded before the amendment came into force. It was clarified that the amendment must be applied to all pending matters, regardless of the refund status at the time of the proceedings. The Court also emphasized that Section 11B allows for a purchaser to claim a refund if they can demonstrate that the burden was not passed on to another person. Ultimately, the Court concluded that the Tribunal had misconstrued the judgment of the Supreme Court in Mafatlal Industries Ltd. and ruled in favor of the revenue, holding that the amendment to Section 11B applied to the assessee's refund application. The reference was disposed of, settling the dispute on the interpretation of Section 11B and unjust enrichment in the context of the case.
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