Refund claims under provisional assessments prior to the 1999 amendment to Rule 9B of the Central Excise Act do not require the test of unjust enrichment.

JUDGMENT :

Challa Kodanda Ram, J.

Heard Mr. Swaroop Orilla, appearing on behalf of Mr. M.V.J.K. Kumar, learned Senior Standing Counsel for Central Excise, Customs and Service Tax and Mr. K. Raji Reddy, learned counsel for the respondent.

2. This Appeal by the Revenue, invoking Section 35-G of the CENTRAL EXCISE ACT , 1944 (for short, ‘the Act’), challenges the final order No. A/30782/2016, dated 03.08.2016 in Appeal No. E/964/2012 on the file of the Central Excise and Service Tax Appellate Tribunal (CESTAT), Regional Bench, Hyderabad.

3. In this Appeal, two substantial questions of law have been raised:

1) Whether the Hon’ble CESTAT’s decision is correct in holding that refund arising out of the finalization of provisional assessments during the period February 1985 to April 1995 need not pass the test of unjust enrichment as the amendment to sub-rule (5) of Rule 9B came into force only w.e.f. 25.06.1999; and

2) Whether Hon’ble CESTAT’s Final Order was correct in setting aside the impugned order in Appeal dated 30.08.2011 passed by the Appellate Authority and decided the case without discussing on the grounds put- forth and the case laws referred therein.

4. The narration of facts, as is evident from the grounds of Appeal, discloses that the case has a chequered history and it has undergone various stages of litigation, though, in substance, the issue relates to the duty collected from the respondent (hereinafter be referred to as the assessee’’) on the medicaments manufactured by them for the period April 1985 to April 1991. Initially, the medicaments that are being manufactured by the assessee were assessed to duty, denying their claim for exemption, as the goods manufactured i.e. ayurvedic medicines attract duty. The assessee was unsuccessful before the appellate authorities and up to the High Court. However, finally, the Supreme Court, through the order dated 30.03.1995, had set at rest the controversy holding that the goods manufactured by the assessee are ayurvedic medicines and therefore, they are entitled to be exempted from duty. Immediately thereafter, on 20.09.1995, the respondent-assessee filed a claim for refund of duty paid on the subject goods for the period from 1985 to 26.04.1995. The jurisdictional Assistant Commissioner, by order dated 13.02.1995, rejected the Application for refund on the ground of non-submission of the following documents, in support of the claim:

1) Documentary evidence to show that the incidence of duty has not been passed on to any other person.

2) Duplicate copies of PLA/PG23A Part-II for the relevant period.

3) Triplicate copies of GP1s/duplicate invoices for relevant period.

4) A work sheet showing details of duty payment GP1 wise/invoice was for the relevant period.

5. In Appeal, the order-in-original dated 13.02.1995 of the Assistant Commissioner was set aside by order, dated 24.09.1996 and the matter was remanded for fresh decision after examination of the documents that might be submitted by the assessee. The Appellate Authority had also recorded the undertaking given by the assessee not to claim interest because of the delay that might be caused due to remand of the matter. Thereafter, once again, the Assistant Commissioner, by order dated 10.03.1997, rejected the claim of the assessee holding that:

“ ................ The assessees have submitted all the documents except documentary evidence to prove that excise duty paid was not passed on to any other person. The assessees have not produced the relevant and necessary documentary evidence to process their refund claim Section 11B clearly stipulated that a ref