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Applicability of the principle of unjust enrichment in a refund claim filed by a public sector undertaking for excess duty and interest paid on ex-bond clearance of warehoused goods. Analysis: The appeal before the Appellate Tribunal CESTAT, Kolkata revolved around the applicability of the principle of unjust enrichment in a refund claim by a public sector undertaking. The appellant company sought a refund of Rs. 4,76,255.00 for excess duty and interest paid on ex-bond clearance of warehoused goods. The lower authority, citing unjust enrichment, sanctioned a refund of Rs. 3,16,611.00 and ordered the amount to be credited to the Consumer Welfare Fund, rejecting the remaining refund claim of Rs. 1,59,644.00. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal. During the hearing, the appellant company's representative argued that the Commissioner (Appeals) had disregarded crucial evidence, including certificates from the company's manager and a chartered accountant, indicating a debit balance with the Collector of Customs. The representative contended that the Commissioner did not adequately verify the contents of these certificates, leading to an unjust denial of the refund claim. On the other hand, the Revenue's representative highlighted the extensive discussion in the Commissioner's findings and referenced a Supreme Court case emphasizing the application of unjust enrichment even in cases of captive consumption. The Tribunal, after considering both arguments, examined the Commissioner's detailed discussion on the unjust enrichment issue. The Commissioner's order emphasized the lack of evidence or costing data to demonstrate that the duty incidence had not been passed on to the buyers of the goods. The Tribunal concurred with the Commissioner's findings, noting that the appellant company failed to provide evidence to rebut the presumption under Section 28D of the Act that the duty incidence had been passed on to the buyers. Consequently, the Tribunal upheld the Commissioner's decision that the refund claim was barred by the principles of unjust enrichment. Regarding the claim for refund of interest, the Tribunal agreed with the Commissioner that it was not sustainable in law. The Tribunal clarified that interest is calculated based on the duty amount at the warehousing date, unaffected by subsequent changes in duty rates at ex-bond clearance. Thus, the Tribunal upheld the Commissioner's decision on this aspect as well, ultimately rejecting the appeal filed by the appellant company.
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