CENTRAL EXCISE CIRCULAR No.518/14/2000-CX Dated 3rd March,2000

Application of the doctrine of unjust enrichment to provisional assessment cases

Recently the Southern Bench of CEGAT vide its final Order 1786/99 dated 21.7.1999 in the case of M/s TVS Suzuki had held that provisions of unjust enrichment under Section 11B cannot be invoked in the cases of refund where assessments were provisional under Rule 9B of the Central Excise Rules before insertion of proviso to sub-rule (5) of Rule 9B in June, 1999.

2. Board had, in fact, examined this issue very carefully in early part of last year in consultation with Law Ministry. It was advised that there could be doubts about the true purport of observations of Hon"ble Court in its decision in Mafatlal Industries case (in para 95) of the order, vis-a-vis categorical findings for application of unjust enrichment, provisions before granting any refunds in other paras (like para 99) and clear provisions of Section 11B. To remove all doubts, Rule 9B was simplified by adding a proviso to sub-rule 9B (5) by Notification No. 45/99-CE (NT) dated 25-6-1999. However, as even for the past period, it was felt that non-applicability of unjust enrichment provisions was seriously debatable and could never have been the intention of the Hon"ble Apex Court while making certain observations in para 95 as aforesaid, the question of filing an appeal against the aforementioned CEGAT judgment was referred to Law Ministry. On their advice, as approved by the Attorney General, a civil appeal has already been filed in the Apex Court. A copy of the advice given by the Law Ministry1 / A.G., in this regard, is also enclosed for ready reference.

3. You are requested to bring this to the notice of the field formations for necessary action.

Sd/-
K.K Jha
Director (Review)

(Please refer Cir. No. 744/60/2003-CE, Dt. 11/09/2003 Application of the doctrine of unjust enrichment to provisional assessment cases)

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