2002 (2) TMI 466 - AT - Customs

Summary

Issues:
Availability of refund to M/s. Korin India Ltd. arising from the provisional assessment of imported machinery for production of automotive rear axle/spares.

Analysis:
The main issue in this case pertains to the availability of a refund to M/s. Korin India Ltd. regarding the security deposit made for the provisional clearance of imported machinery. The Assistant Commissioner initially ordered the credit of the security amount in the Consumer Welfare Fund, but the Commissioner (Appeals) set aside this decision, stating that the amount was a security deposit and not subject to the doctrine of unjust enrichment in case of captive consumption. The matter was remanded for further examination based on the balance sheet and other documents.

The legal representative of M/s. Korin India Ltd. argued that the security amount should be refunded as per Section 18 of the Customs Act, citing precedents like Mafatlal Industries Ltd. v. U.O.I. and Oswal Agro Mills Ltd. v. Assistant Collector to support the exclusion of security refunds from the principle of unjust enrichment. Additionally, decisions such as Escorts Yamaha Motors Ltd. v. Commissioner of Customs were referenced to emphasize that refunds from final assessments are not subject to unjust enrichment provisions.

On the other hand, the Revenue contended that the duty amount had been passed on to the buyers, thus no refund should be granted. They referenced the decision in UOI v. Solar Pesticides Ltd. to support their argument.

After considering both sides, the Tribunal found that the provisional assessment was made pending valuation enquiry, and the additional amount paid was in the nature of surety, not duty. Citing the Supreme Court's observations in Mafatlal Industries Ltd. and decisions like Escorts Yamaha Motors Ltd., the Tribunal concluded that the importers were eligible for a full refund as the value declared had been accepted by the Customs House. The Tribunal distinguished the case from UOI v. Solar Pesticides Ltd. as it did not involve provisional assessment, ultimately rejecting the Revenue's appeal and allowing the appeal filed by M/s. Korin India Ltd.