2009 (12) TMI 82 - HC - Central Excise

Refund of excess duty paid relevant date - The petitioner filed a reply to the show cause notice inter-alia contending that they have earlier filed refund of claim before their jurisdictional Range Superintendent on 20.4.1993 which was returned to them with the remarks that the same be submitted to the Divisional Office and as such the claim could not be considered time barred. The question of incidence of duty claimed from the buyer did not arise. The Assistant Collector passed an order on 5.5.1995 and partially rejected the refund claim of Rs. 3, 30, 425/- and sanctioned a refund of Rs. 2, 98, 119/-. One of the basic reasons for granting refund of claim was that the doctrine of unjust enrichment was not attracted as the petitioner was manufacturing poles for their captive consumption and no pole was being sold to the customer. tribunal allowed the refund claim partially and rejected the refund lciam of Rs. 1, 82, 934 held that - claim should have been filed before the expiry of six months from the relevant date which is defined in Explanation to Section 11 B(f) of the Act. Accordingly the relevant date has to be computed from the date of payment of duty which fell admittedly beyond the period of six months. In fact it is the duty of the Tribunal to act in accordance with the statutory provisions. Another aspect of the matter is that doctrine of unjust enrichment would even apply to cases of captive consumption Decision of tribunal upheld

Summary

Issues:
1. Invocation of Section 35 (H) of the Central Excise Tax Act, 1944 for reference to the Tribunal.
2. Claim for refund of excess duty paid on PCC Poles.
3. Application of the doctrine of unjust enrichment in cases of captive consumption.
4. Question of limitation in filing refund claims under Section 11 B of the Act.
5. Tribunal's authority to act in accordance with statutory provisions.
6. Relevance of the Supreme Court judgment in Union of India v. Solar Pesticide Pvt. Ltd.

Analysis:

1. The petitioner invoked Section 35 (H) of the Central Excise Tax Act, 1944, seeking directions for the Tribunal to refer substantial questions of law arising from the order dismissing the rectification application and the original order. The Tribunal held that the refund claim should have been filed within six months from the relevant date, as per Section 11 B(f) of the Act, which was beyond the specified period.

2. The petitioners, engaged in manufacturing PCC poles for captive consumption, filed a refund claim for excess duty paid. The Assistant Collector partially rejected the claim, citing the absence of unjust enrichment as the poles were not sold in the open market. The Commissioner (Appeals) and the Tribunal partially allowed the appeal but ultimately rejected the claim based on the limitation period specified in Section 11 B of the Act.

3. The Tribunal emphasized that the doctrine of unjust enrichment applies even in cases of captive consumption, as highlighted in the Supreme Court judgment in Union of India v. Solar Pesticide Pvt. Ltd. The Tribunal's decision was based on the statutory provisions and the duty to act in accordance with the law, dismissing the petition for reference to the Court.

4. The Tribunal's findings on the limitation period for filing refund claims under Section 11 B of the Act were considered a mixed question of fact and law. The relevant date for computation, falling beyond the six-month period, led to the rejection of the refund claim. The Tribunal's adherence to statutory provisions and legal principles guided its decision-making process.

5. The Tribunal's role in ensuring compliance with statutory provisions was highlighted, emphasizing the need to follow the prescribed timelines and requirements under the Central Excise Tax Act, 1944. The decision to dismiss the petition for reference was based on the Tribunal's interpretation and application of the relevant legal provisions.

6. The judgment referenced the Supreme Court case of Union of India v. Solar Pesticide Pvt. Ltd. (2000) to support the application of the doctrine of unjust enrichment in cases of captive consumption. The Tribunal's decision aligned with legal precedents and established principles, leading to the dismissal of the reference petition.

In conclusion, the judgment addressed various legal aspects concerning refund claims, limitation periods, unjust enrichment, and compliance with statutory provisions, ultimately dismissing the petition for reference based on the Tribunal's findings and legal interpretations.