Refund claims arising from provisional assessments are exempt from the principles of unjust enrichment as per established judicial precedents.

JUDGMENT :

P. Sam Koshy, J.

Heard Mr. Dominic Fernandes, learned Senior Standing Counsel for CBIC appearing on behalf of the appellant / Revenue in both C.E.As., Mr. S.Sriram, learned counsel for the respondent / assessee in C.E.A. No.114 of 2011, and Mr. Siddram Maneendra, learned counsel for the respondent/assessee in C.E.A. No.155 of 2017.

2. These are two appeals under Section 35G of the CENTRAL EXCISE ACT , 1944 (for short ‘the Act’) preferred by the appellant i.e. the Customs Department.

3. C.E.A.No.114 of 2011 is one where the challenge is to the Final Order No.882 of 2009, dated 26.03.2009 in Appeal No.CE/938/2008, passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zone Bench at Bangalore. The issue in this Appeal relates to the period between February, 1985 to 26.04.1995. Further, C.E.A. No.155 of 2017 is one where the challenge is to the Final Order No. A/30782/2016, dated 03.08.2016 in Appeal No. E/964/2011, passed by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench, Hyderabad.

4. Vide the impugned order in C.E.A. No.155 of 2017, the CESTAT held that pursuant to the Final Order No.882 of 2009, dated 26.03.2009, refund arising out of the finalization of provisional assessment during the period February, 1985 to April, 1995 need not pass the test of unjust enrichment and accordingly held that the assessee is entitled for refund of Rs.2,86,39,117/- for the period between March, 1985 to April, 1991 and March, 1994 to April, 1995.

5. In C.E.A. No.155 of 2017, the claim of the assessee was finalized in terms of the order dated 26.03.2009 passed by the CESTAT which is under challenge in C.E.A. No.114 of 2011.

6. The primary contention of the learned Senior Standing Counsel for CBIC in C.E.A. No.155 of 2017 was that since the order dated 26.03.2009 of the CESTAT has already been challenged in C.E.A. No.114 of 2011, it cannot be presumed that the provisional assessment has attained finality and therefore the CESTAT ought not to have decided the appeal of the assessee which is under challenge in C.E.A. No.155 of 2017 and should have waited till the finalization of C.E.A. No.114 of 2011. Thus, the fate of C.E.A. No.155 of 2017 solely revolves around the fate of C.E.A. No.114 of 2011. If the appeal of the Revenue viz., C.E.A. No.114 of 2011 fails or is dismissed, as a natural corollary C.E.A. No.114 of 2011 also would automatically get dismissed as the very ground of challenge in C.E.A. No.155 of 2017 would no longer survive and the result would be in converse if C.E.A. No.114 of 2011 is allowed in favour of the Revenue.

7. In view of the aforesaid factual backdrop, we proceed to decide C.E.A. No.114 of 2011. The substantial question of law raised in this appeal for ready reference is reproduced hereunder:

“Whether CESTAT is justified in holding that Principles of Unjust Enrichment has not application in the present case without considering the law laid down by Apex Court regarding Principles of Unjust Enrichment in decisions reported in M/s Sahakari kand Udyog Mandal Limited Vs CCE 2005(181)-ELT.328 SC and State of Maharashtra & Others Vs. Swanstone Multiplex Cinema (P) Limited 2009-TIOL-90-SC ET.”

8. It would be relevant at this juncture to take note of the Circular of the Central Board of Excise and Customs i.e. Circular No. 794/27/2004-CX., dated 23.06.2004, whereby the Central Board of Excise and Customs clarified in respect of the doctrine of unjust enrichment to cases of provisional assessment and payment of duty paid under protest. The