2007 (5) TMI 482 - AT - Customs

Provisional assessment - Refund claim - Unjust enrichment - Words and Phrases - interpretation of statute - subsequent finalisation of assessment.

Summary

Issues Involved:
1. Provisional Assessment and Finalization
2. Reassessment
3. Refund Claim and Unjust Enrichment

Issue-wise Detailed Analysis:

1. Provisional Assessment and Finalization:
The appellant contested the order dated 30th June 2003, which denied a refund of Rs. 1,07,09,835/- on the grounds of unjust enrichment. Initially, the Tribunal had remanded the matter for de novo adjudication, emphasizing that the book-value of the machines should be scrutinized. The Deputy Commissioner of Customs, Special Valuation Branch, Kolkata, accepted the invoice price for 12 second-hand machines and adjusted the value for 14 others based on the Chartered Engineer's Certificate. This led to a refund claim after the final assessment on 10-12-1999. The Assistant Commissioner of Customs rejected this refund on the basis that the claim was governed by Section 27 of the Customs Act, 1962, and was subject to unjust enrichment scrutiny. The Commissioner (Appeals) upheld this rejection.

2. Reassessment:
The Tribunal observed that the final assessment order dated 10-12-1999 was a result of the provisional assessment process. The term "assessment" under Section 2(2) of the Act includes reassessment. The initial provisional assessment led to a final assessment, which determined the duty liability and the entitlement to a refund. The Tribunal emphasized that the refund arising from the final assessment should be processed suo motu by the authorities under Section 18 of the Act, following the Supreme Court's judgment in Allied Photographics India Ltd.

3. Refund Claim and Unjust Enrichment:
The Tribunal examined whether the refund claim should be subjected to the doctrine of unjust enrichment. The Supreme Court's decision in Mafatlal Industries Ltd. and Allied Photographics India Ltd. clarified that refunds arising from the finalization of provisional assessments are not subject to unjust enrichment. The Tribunal concluded that the refund of Rs. 1,07,09,835/- should be granted to the appellant without the bar of unjust enrichment, as the duty incidence was not passed on to any other party.

Conclusion:
The Tribunal allowed the appeal, directing that the refund should be processed without applying the doctrine of unjust enrichment. The cross-objection filed by the respondent was also disposed of. The operative part of the order was pronounced in the open court on 31-5-2007.