The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the disputed amount paid under protest much after the clearance of the goods and the amount, therefore, is not covered by unjust enrichment.
The bench of Binu Tamta (Judicial Member) has observed that once the supplies have already been made, any amount paid after, as tax or deposit, the burden of the amount cannot be passed on to the assessee and, therefore, the test of unjust enrichment is not applicable.
The appellant had received Investment Subsidy against Entitlement Certificate sanctioned under the Rajasthan Investment Promotion Policy – 2010 , which was adjusted towards payment of VAT and CST in their returns during the period January, 2014 to June, 2015.
The Department had raised a demand of central excise duty on the investment subsidy. The issue was finally decided by the Tribunal setting aside the demand of duty and penalty with consequential benefits. For the period, the appellant filed the refund claim, which was sanctioned to them.
The appellant had also filed the refund claim for the amount of excise duty paid on VAT by them at their own risk for the subsequent period. The Adjudicating Authority rejected the refund claim on the ground of limitation. The appeal filed by the appellant was allowed by way of remand observing that the limitation clause of filing refund claim within one year is not applicable.
Since the issue of unjust enrichment has not been particularly examined, the case was remanded to the Adjudicating Authority. On remand, the Adjudicating Authority sanctioned the refund claim.
The Department preferred an appeal before the Commissioner (Appeals), inter alia, submitting that the Adjudicating Authority had not examined the books of accounts, in which the assessee had shown the duty paid suo moto/under protest on the subsidy received under RIPS as “expenses‟ incurred by them.
The Adjudicating Authority had decided the issue of bar of unjust enrichment although the Tribunal in other cases have already held that the plea of unjust enrichment is not applicable in case of refund of duty deposited under protest at the time of investigation.
Any amount deposited during the pendency of adjudicating proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment would not apply when a refund is claimed for this amount.
The deposit “under protest‟ was made against the anticipated liability and which liability though fructified by the respondent-department was set aside by the CESTAT.
Case Details
Case Title: M/s. Oiles India Pvt. Ltd. Versus Commissioner of Central Excise & CGST
Case No.: Excise Appeal No.50314 of 2024
Date: 29.04.2025
Counsel For Appellant: B.L. Yadav
Counsel For Respondent: Vishwa Jeet Saharan
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