IMPORTANT POINT
Possession of Section 11B of the Central Excise Act, 1944 do not apply where refund has been finally and unconditionally made.

JUDGMENT

Shah, J.-M/s Hindustan Metal Pressing Works removed the excisable goods at the effective rate of duty awaiting approval of their classification list No. 2/88 in which they claimed benefit of exemption Notification No.175/86-CE dated 1-3-1986. In pursuance of the approval of the classification list on 21-6-1988, the Range Superintendent granted the refund of excise duty for the months of April 1988 to August 1988.

2. Thereafter, a show-cause notice dated 22.2.1989 was issued for recovering the said amount on the ground that it was erroneously refunded. By order dated 8.2.1990, the Assistant Collector, Central Excise confirmed the demand for a sum of Rs.2,36,515.55 on the basis of principles of unjust enrichment by the assessee. The appeal against the said order was dismissed by the Collector (Appeals) by judgment and order dated 20.11.1990. The Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal ) also dismissed the appeal by impugned judgment and order dated 20.10.1999. That order is challenged by filing this appeal.

3. Learned counsel appearing on behalf of the appellant submitted that the orders passed by the authorities below are, on the face of it, illegal and de hors the statutory provision. He contended that the foundation for initiating the proceedings under Section 11-A of the Central Excise Act, 1944 (hereinafter referred to as the Act ) in the present case is so-called erroneous refund of the excise duty paid by the appellant. At the time when the refund order was passed on the basis of Rule 173-I of the Central Excise Rules (hereinafter referred to as the Rules ), there was no question of erroneous refund. It was based on assessment of RT-12. Admittedly, there is no mistake or error in such assessment or refund. Hence, it is his submission that principles of unjust enrichment would not be applicable in the present case.

4. As against this, it has been pointed out that though classification list was approved in June 1988, the appellant continued to collect duty of excise on enhanced rate from the beginning of financial year 1988-89 even though they were availing benefit of exemption Notification No. 175/86 in the preceding financial year and, therefore, Assistant Commissioner was justified in coming to the conclusion that the appellant had intentionally paid excise duty with an intent to get the same by way of refund and to become enriched with the public money.

5. In the present case, it is admitted that duty was paid in excess of effective rate of duty and the excess duty paid was refunded while assessing the RT-12 Returns. The question, therefore, is - whether the principles of unjust enrichment as incorporated in amended provisions would be applicable to the facts of the present case?

6. Admittedly, refund of the excise duty paid in excess was granted in 1989. Thereafter, sub-section (2) of Section 11-B which incorporates the principle of unjust enrichment had come into force w.e.f. 20.9.1991, which inter alia provides that duty of excise paid in excess would be refunded if the manufacturer had not passed on the incidence of such duty to any other person. This provision is not at all attracted. There is basic error in approach by the Authorities below as the assessee has not filed any application under Section 11B of the Act for refund of the excise duty paid by him. There is no question of application of principles of unjust enrichment as incorporated in Section 11B. Other relevant provision would be Section 11D which also came into force from 20.9.1991. It inter alia provides that every person who is liable to pay duty under the Act or the Rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under the Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise is required to forthwith pay the amount so collected to the cred