2007 (2) TMI 399 - AT - Customs

Summary

Issues:
1. Appeal against order-in-appeal directing refund to Consumer Welfare Fund.
2. Jurisdiction of lower authority in quantifying refund.
3. Principles of unjust enrichment in refund claims.

Analysis:

Issue 1: The appellant filed an appeal against the order-in-appeal directing the sanctioned refund to be credited to the Consumer Welfare Fund. The appellant contended that the refund claim was initially rejected by the Deputy Commissioner of Customs, but the Commissioner (Appeals) allowed the appeal and directed the proper officer to quantify the refund after verifying documents. The appellant argued that the order to credit the refund to the Consumer Welfare Fund was not sustainable as it went beyond the scope of the Commissioner's order. The appellant relied on the Supreme Court decision in Union of India v. Kamalakshi Finance Corporation Ltd., emphasizing that lower authorities must follow higher appellate authority orders.

Issue 2: The Tribunal found that the Commissioner (Appeals) had already allowed the appellant's appeal and directed the lower authority to quantify the refund amount after verification. The Deputy Commissioner, without challenging the Commissioner's order, quantified the refund and directed it to the Consumer Welfare Fund. The Tribunal held that since the Commissioner's order was not challenged, the direction to credit the refund to the Fund was unsustainable. Therefore, the impugned order upholding this decision was set aside, and the appeal was allowed.

Issue 3: The Revenue argued that all refund claims are subject to the principles of unjust enrichment, and the refund was rightly credited to the Consumer Welfare Fund as the burden of duty was not shown to be passed on to customers by the appellant. However, the Tribunal focused on the procedural aspect of the case, emphasizing that the direction to credit the refund to the Fund was not in line with the Commissioner's order sanctioning the refund. The Tribunal's decision was based on the procedural correctness rather than the unjust enrichment principle in this case.