Doctrine of unjust enrichment whether applies to refund of pre-deposit when the burden is not passed on to the customers.

Doctrine of unjust enrichment whether applies to refund of pre-deposit when the burden is not passed on to the customers.

The respondent made a pre-deposit u/s. 35F of the Central Excise Act, 1944. In view of favourable decision from the Commissioner (Appeals), the respondent filed refund claim for pre-deposit. The lower adjudicating authority and the Commissioner (Appeals) granted the refund. Therefore, the department filed the present appeal and contended that Mumbai Tribunal in case of Poona Rolling Mills vs. CCE, Pune – I 2009 (240) ELT 85 held that the doctrine of unjust enrichment is applicable in case of pre-deposits as well, and the said doctrine was not examined in the said case. However, the respondent argued that the said doctrine did not apply to the present case in view of non-passing of the burden of such pre-deposit to any other person.

 Held:

Section 11B of the Central Excise Act, 1944 dealing with doctrine of unjust enrichment is applicable to duties and not to pre-deposits. Since the burden of pre-deposit was passed on to others in the case of Poona Rolling Mills (Supra), the said case is distinguished from the present case. The doctrine of unjust enrichment does not apply to refund of pre-deposit when the same is not passed on to others.