2006 (3) TMI 432 - AT - Central Excise

Summary

Issues:
Application for waiver of pre-deposit of duty based on unjust enrichment principle and applicability of small scale exemption notification.

Analysis:
The applicant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 2,65,285.58. The issue arose when the applicant, after initially being denied the benefit of a small scale exemption notification, won an appeal allowing the benefit. Subsequently, the applicant filed a refund claim for the duty paid. However, the refund was rejected on the grounds of unjust enrichment. The Commissioner found that the duty had been recovered from the customers based on the duty shown separately in the gate passes submitted by the applicant.

The applicant argued that the assessments were provisional, and therefore, the principle of unjust enrichment should not apply. It was contended that Rule 9B of the Central Excise Rules was amended post the disputed period to include the principle of unjust enrichment even in cases of provisional assessment. In response, the Revenue, represented by the ld. JDR, cited a decision of the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. v. CCE, where it was held that every refund is subject to the principles of unjust enrichment.

After considering the arguments and circumstances of the case, the Tribunal opined that it was not a suitable case for a complete waiver of the disputed amount. Consequently, the applicant was directed to deposit Rs. 90,000 within six weeks. Upon compliance with this directive, the pre-deposit requirement for the remaining duty amount would be waived for the appeal hearing. The applicant was instructed to report compliance by a specified date.

In conclusion, the Tribunal's decision balanced the applicant's request for waiver with the principle of unjust enrichment, ultimately requiring a partial deposit before proceeding with the appeal hearing.