2010 (11) TMI 926 - AT - Customs

Summary

Issues involved: Appeal against Order-in-Appeal setting aside refund of redemption fine and penalty.

Summary:
1. The appellant exported ladies nighties misdeclared as woven fabrics, leading to confiscation of goods. The appellant appealed against the Order-in-Original, which was partially set aside by CESTAT. Subsequently, the lower adjudicating authority allowed the refund of redemption fine and penalty. The department appealed against this decision, leading to the current appeal.

2. The appellant argues that the department is obligated to implement CESTAT's order and that the doctrine of unjust enrichment does not apply to the refund of redemption fine and penalty. They cite relevant judgments to support their contention.

3. The Commissioner (Appeals) relied on a specific judgment regarding unjust enrichment in the case of fine and penalty. The appellant challenges this application of the judgment and argues that the decision was wrongly applied in their case.

4. The ld. JDR supported the findings of the Commissioner (Appeals).

5. Upon review, it was found that the refund arose from CESTAT's order, making the appellant eligible for the refund. The issue at hand is whether the doctrine of unjust enrichment applies to the refund of redemption fine and penalty. The Commissioner (Appeals) order was deemed self-contradictory in its application of relevant judgments.

6. The High Court's ruling clarified that the principles of unjust enrichment do not apply to redemption fine and penalty. The Act itself distinguishes between duty and fine/penalty, indicating that unjust enrichment does not apply to the latter. Therefore, the Commissioner (Appeals) order was set aside, and the appeal was allowed.