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Issues involved: Dispute over entitlement to benefit of Notification No. 36/96-Cus., refund claim, adjustment of duty liability, unjust enrichment, applicability of Section 27 of Customs Act, 1962, interpretation of finalisation of provisional assessments, reliance on case laws.
Summary: Entitlement to Benefit of Notification No. 36/96-Cus.: The appellant registered a project contract for setting up a Gas Power Plant under the Project Import Regulation, 1986 with Visakhapatnam Customs House. After a dispute, the appellant was entitled to a refund of excess duty paid. However, the Revenue issued a Show Cause Notice for adjusting the duty liability due to the addition of supervision charges to the assessable value, proposing the balance to be credited to the Consumer Welfare Fund based on unjust enrichment. The lower authority confirmed this, citing the applicability of Section 27 of the Customs Act, 1962 to refunds post finalisation of assessment. Unjust Enrichment and Finalisation of Provisional Assessments: The appellant contended that unjust enrichment should not apply in cases of imported goods captively consumed arising from finalisation of provisional assessments. Citing various case laws, the appellant argued against the imposition of unjust enrichment in such scenarios. However, the Revenue maintained that unjust enrichment is applicable to all Customs cases, including provisional assessments, post the Customs law amendment. Judicial Interpretation and Decision: The Tribunal examined previous decisions and found that the issue of unjust enrichment must be scrutinized in all refund cases, including finalisation of provisional assessments, as per the legal position. The Tribunal distinguished between Central Excise and Customs cases, emphasizing the mandatory examination of unjust enrichment before granting refunds in Customs cases. Relying on the decision of the Bombay High Court upheld by the Apex Court, the Tribunal rejected the appeal, affirming the lower authority's decision based on the necessity to assess unjust enrichment in Customs refund cases. Conclusion: The Tribunal upheld the lower authority's decision, emphasizing the need to evaluate unjust enrichment in all Customs refund cases, including those arising from finalisation of provisional assessments, based on legal precedent and the distinct nature of Customs cases compared to Central Excise matters.
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