2007 (5) TMI 410 - AT - Customs

Refund claim - amount which became due after the assessment were finalized by the authorities under provisions of Section 18 of the Customs Act, 1962 - Unjust enrichment -

Summary

Issues Involved:
1. Rejection of refund claims by the appellant.
2. Appeal by Revenue against the order allowing refund.
3. Applicability of the doctrine of unjust enrichment.
4. Applicability of amended Section 18 of the Customs Act, 1962.

Detailed Analysis:

1. Rejection of Refund Claims by the Appellant:
The appellant filed refund claims for amounts arising from the final assessment of Bills of Entry. Specifically:
- Appeal No. C/36/07 pertains to a refund claim of Rs. 1,11,187/-.
- Appeal No. C/105/07 pertains to a refund claim of Rs. 20,746/-.
- Appeal No. C/107/07 pertains to a refund claim of Rs. 10,561/-.
The Adjudicating Authority rejected these claims on the grounds of unjust enrichment. However, the Commissioner (Appeals) allowed the refund claim of Rs. 1,11,187/- but rejected the other two claims.

2. Appeal by Revenue Against the Order Allowing Refund:
The Revenue appealed against the order allowing the refund claim of Rs. 1,11,187/-. The Revenue argued that the bar of unjust enrichment applies even to refunds arising from provisional assessments.

3. Applicability of the Doctrine of Unjust Enrichment:
The appellant argued that the doctrine of unjust enrichment should not apply to provisional assessments finalized before the amendment of Section 18 on 14-7-2006. The appellant cited the Supreme Court's decisions in Commissioner of Central Excise, Mumbai-II v. M/s. Allied Photographics India Ltd. and Commissioner of Central Excise, Chennai v. M/s. TVS Suzuki, which support the non-applicability of unjust enrichment to provisional assessments finalized before the amendment.

4. Applicability of Amended Section 18 of the Customs Act, 1962:
The Tribunal considered the provisions of Section 18 before and after the amendment on 14-7-2006. Before the amendment, there was no requirement to prove non-passing of duty incidence for provisional assessments. The Tribunal referred to the Supreme Court's judgment in M/s. Oriental Exports v. Commissioner of Customs, New Delhi, which held that the law applicable at the time of finalization of assessments governs the refund claims.

Judgment:
- Refund Claims Prior to Amendment: The Tribunal allowed the refund claims of Rs. 1,11,187/- and Rs. 20,746/-, as these were finalized before the amendment on 14-7-2006. The Tribunal followed the Supreme Court's judgments in M/s. Oriental Exports and M/s. TVS Suzuki Ltd., which held that the doctrine of unjust enrichment does not apply to provisional assessments finalized before the amendment.
- Refund Claim Post Amendment: For the refund claim of Rs. 10,561/-, finalized after the amendment, the Tribunal remanded the case back to the lower authorities. The appellant must provide evidence that the incidence of duty was not passed on to the customers to claim the refund.
- Revenue's Appeal: The Tribunal dismissed the Revenue's appeal, as the Supreme Court's decisions clearly favored the assessee regarding the non-applicability of unjust enrichment to provisional assessments finalized before the amendment.

Conclusion:
The Tribunal set aside the impugned order, allowed the appeals of the appellants for the refund claims finalized before the amendment, and remanded the case for the refund claim finalized after the amendment. The Revenue's appeal was dismissed.