Doctrine of Unjust enrichment does not Apply to Payment of Duty by way of pre-deposit: CESTAT [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT),Mumbai bench held that doctrine of unjust enrichment can’t apply to the payment of duty by way of pre-deposit.

Shri Jay Chheda appeared for the appellant and Shri Prabhakar Sharma appeared for the respondent 

The appellant engaged in the business of trading cars as an authorised dealer for Maruti Udyog Ltd.  Dealership agreement bounds the Appellant to provide first free servicing to the customers who purchased their Maruti Cars from the Appellant. Service Tax demand to the tune of Rs.11,11,997/- along with interest under Section 75 and equal penalty under Section 78 of the Finance Act, 1994 was confirmed.

The appellant’s refund request was indirectly denied through an adjudication order that also had undergone an appeal procedure wherein the Commissioner of Central Tax (Appeals-II),confirmed the Order-in-Original wherein the refund amount of Rs.21,26,143/- under Section 11B of the Central Excise Act was sanctioned but ordered that the same be transferred to the Consumer Welfare Fund established under Section 12C of the Central Excise Act 1944 read with Section 83 of the Finance Act.

The appellant argued that Section 11B of the Central Excise Act would not be applicable for refund of pre-deposit made under the provision of Section 35F for which doctrine of unjust enrichment would not be a bar for such refund. Further contended that Section 11B has no application to the deposit made.

It was observed that no authority would show that any amount being shown as expenditure would automatically get credited to the income side as if it is realised from a third party/person.

Dr Suvendu Kumar Pati, member (judicial) set aside the impugned order passed by the Commissioner of Central Tax (Appeals-II and held that the appellant was entitled to Rs.21,26,143/- along with applicable interest.

To Read the full text of the Order CLICK HERE

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