ORDER
G.N. Srinivasan, Member (J)
1. This is an appeal filed by the department against the decision of the Collector (Appeals), Mumbai made in GS/799/B.I/92, dated 21-10-1992 whereunder he held that the respondent was entitled to refund of the duty.
2. The respondent is manufacturing well known brand of tobacco, cigarette etc. The disputed period is from 28-2-1986 to 23-6-1986. A notification in terms of Section 11C(1) was made on 26-8-1998 whereunder it was stated that the Central Government directed that the whole of duty of excise payable under the Act on cut tobacco should not be required to be paid in respect of their commodities. The date of amendment of Section 11C was made on 1-7-1988. The notification issued under Section 11C was on 26-8-1988. The amount was refunded on 18-9-1990. Show cause notice was issued on 27-12-1990. In the impugned order the Collector has held that, following the judgment of the Tribunal in CCE, Chandigarh v. Mahavir Spinning Mills Ltd. -1988 (33) E.L.T. 115, the amount claimed by the respondent should be refunded. The DR argues that the notification was issued on 21-8-1988. Therefore the respondent is not entitled to claim refund. I cannot accept this argument. But she raises an interesting point, viz. question of doctrine of unjust enrichment. She says that when an appeal has been filed before the Tribunal against the impugned order, the entire matter is at large including the legality or otherwise of the order of refund. In other words she contends that appeal is a continuation of original proceedings.
3. As against this learned Counsel Shri Rohan Shah would contend that the entire approach of the department is wrong inasmuch as nowhere did the spirit and essence of Section 11B of the Central Excise Act has been referred. The amendment to Section 11C was made in 1991, i.e. by Section 4 of the Central Excise and Customs Laws (Amendment) Act, 1991. The refund having been made earlier, viz. 18-9-1990 the question is already closed. Reference to Section 11B is no longer survived. He also specifically stated that nowhere did the department make a reference to Section 11B in the show cause notice or in the grounds of appeal. He also states that the appeal in the stricto sensu cannot be treated as a continuation of the original proceedings inasmuch as the original proceedings comes to an end on 18-9-1990. The order of refund has not been specifically appealed.
4. I have considered the interesting points raised by both sides. I must record that both sides argued in a very clear and cogent manner. If we have to see the things in the proper prospective, we have to come to the following conclusions which are undisputed from the facts. The impugned order was made in 1992. The Assistant Collector passed the order on 6-7-1990 allowing the refund claim. The respondent states that he has actually received the payment on 18-9-1990. Under the circumstances can we say that when the Parliament passed the Act in 1991, amending Section 11(b), can the doctrine of unjust enrichment revive especially when the refund has already been ordered and paid to the assessee ?
5. Shri Rohan Shah during the course of argument stated that there is no reference to the doctrine unjust enrichment in Section 11C. I have gone through Sub-section (2) of Section 11C as amended in 1991.I cannot agree with him. In Sub-section (2) of Section 11C it is specifically stated as follows:- “which would not have been paid in the said notification has been in force, shall be dealt with in accordance with provisions of Sub-section (2) of Section 11B”. The plain reading of Sub-section (2) of Section 11C definitely makes a reference to Section 11B, viz. doctrine of unjust enrichment, but however, the refund having been made in 1990. In the latter judgment of the Supreme Court while explaining the judgment of the same Court made in Mafatlal Industries v. Union of India – 1997 (89) E.L.T. 247, the Supreme Court in the case of Assistant Collector of Customs v. Anam Electrical Manufacturing Co. -1997 (90) E.L.T. 260, in Para (7) (a) has held as follows :-
‘(7)(a) Where the refund claim is rejected by this Court, the assessee who has already obtained any amount by way of refund shall be liable to pay back the same to the Department and the Department shall be entitled to recover the same in accordance with law.’
In the said judgment when the Court has held like this the judgment postulates even in respect of “closed” cases that where refund has been ordered the same amount has to be paid back by the assessee. To me it appears to be revival of the passed cases where the refund has already been made to the assessee. The argument of Shri Rohan Shah is that the argument of Ms. Lakhani that the instant appeal is a continuation of proceedings, nowhere the point of doctrine of unjust enrichment was taken in the show cause notice and in the grounds of appeal. I agree with him on that. But, however, I cannot agree with him on the point that unjust enrichment would never apply in respect of refunded claims. All refund claims have to undergo a test of doctrine of unjust enrichment. It is a salutory one as has been held by the Supreme Court in Mafatlal Industries Ltd. v. Union of India (supra). The argument of Shri Rohan Shah may be attractive at the first blush but has to be rejected because the cases of refunded cases has been taken note of by the Supreme Court in Anam Electrical Manufacturing Co. cited supra. Such cases have to be reopened and tested with doctrine of unjust enrichment. Moreover, if the argument of Shri Rohan Shah is to be accepted then the available right of appeal which is given to the department under Section 35EB becomes nugatory. Under Section 35B any person aggrieved by the order passed by the Commissioner (Appeals) under Section 35A may file appeal to the Appellate Tribunal against such order. When we look into the statute this is an available right given to the assessee as well as the department. The department in this case felt aggrieved against the impugned order, that is why they have filed the appeal. When we look into the statute we have to see the entire provisions of the statute so as to harmonize the same. If 1 have to accept the argument of Shri Rohan Shah, it will amount to negating the right of the department to file an appeal against the order passed by the Commissioner (Appeals) which cannot be contemplated under the circumstances. Hence I hold that the refund in this case which has been granted has to be dealt with in accordance with the observations of the Supreme Court in para 7 (a) of the judgment referred in the case of Assistant Collector of Customs v. Anam Electrical Manufacturing Co. -1997 (90) E.L.T. 260.
6. Appeal is disposed of on the above terms.