2007 (6) TMI 389 - AT - Customs

Refund - Unjust enrichment - Held that - The appellant having come out with clean hands, there is no iota of doubt that the appellant has passed on duty burden for unjust enrichment. Even if it is held that the natural rubber imported were used for captive consumption and has to pass the test of unjust enrichment, the appellant also meets the test on the given facts - there was no unjust enrichment for no reason stated to discard Chartered Accountant s Certificate - appeal allowed.

Summary

Issues:
1. Leviability of cess on natural rubber.
2. Test of unjust enrichment for refund arising from non-leviability of cess.

Analysis:
1. The main issue in this appeal was the levy of cess on natural rubber. The appellant argued that the Tribunal had already decided in a previous case that no cess is payable on natural rubber. The Tribunal upheld this argument, ruling that no cess shall be leviable or collectible in the case of the appellant. This decision was based on the previous judgment by the Bangalore Bench of the Tribunal.

2. The second issue revolved around the test of unjust enrichment for the refund arising from the non-leviability of cess. The Department contended that the appellant should have followed the CBEC circular and should meet the test of unjust enrichment. However, the appellant demonstrated that they did not pass on the cess burden to consumers, as evidenced by the Chartered Accountant's certificate showing that the money was collectible from the Department. The Tribunal found that the appellant had not intended to pass on the burden to consumers and had paid the cess under protest. The Tribunal concluded that there was no unjust enrichment, and the appellant was entitled to the refund as admissible under the law.

In conclusion, the Tribunal allowed the appeal, holding that no cess was leviable on the natural rubber imported by the appellant and that the appellant had met the test of unjust enrichment for the refund. The Tribunal also acknowledged the relevance of a previous decision in a similar case involving TELCO Ltd. v. Commr. of Customs, Mumbai.