2013 (5) TMI 816 - AT - Customs

Suo moto adjustment - excess duty paid by the respondent has been adjusted against the duty demand by the Commissioner (Appeals) - the respondent had filed a refund claim of excess duty paid by them - Held that - reliance was placed in the case of Indian Oil Corporation Ltd. v. CCE Vadodara 2010 (10) TMI 399 - CESTAT AHMEDABAD where it was held that as the selling price of the petroleum products have been fixed by the Government of India under APM regime the question of unjust enrichment does not apply - the respondents are entitled for adjustment of excess duty paid towards short duty paid by them as the respondent filed refund claim in time of excess duty paid by them. The matter is to be remanded back to the adjudicating authority to ascertain whether the respondents are required to pay any duty after adjusting the excess duty paid by them against the duty demanded from them - appeal allowed by way of remand.

Summary

Issues:
Revenue appealing against order adjusting excess duty paid by respondent against duty demand; Cross Objection filed by respondent; Tribunal's consideration of refund claim for excess duty paid; Interpretation of law regarding adjustment between demand and refund; Application of unjust enrichment principle; Distinguishing cases for adjustment of excess duty paid.

Analysis:
The case involved the Revenue appealing against an order where excess duty paid by the respondent was adjusted against duty demand by the Commissioner (Appeals). The respondent also filed a Cross Objection. The respondent had imported crude oil during 1997 to 2004, filing 429 Bills of Entry with provisional assessments. The adjudicating authority found duty payable in some cases and excess duty paid in others. The Commissioner (Appeals) allowed the adjustment based on a Tribunal decision in a similar case. The Revenue challenged this order, leading to the present appeal.

Upon hearing both sides and reviewing the records, the Tribunal noted that the respondent had filed a refund claim for the excess duty paid. Citing a Tribunal decision, the Tribunal emphasized the need for the proper officer to consider such claims during finalization of provisional assessments. The Tribunal clarified that any adjustment between demand and refund should not violate the principle of unjust enrichment, as per previous Tribunal decisions. The respondent's claim for adjustment was not considered by the lower appellate authority, leading to the order being set aside.

The respondent relied on a Tribunal decision in another case to support their entitlement to adjust excess duty paid against short duty paid. The Tribunal distinguished this case from a previous Larger Bench decision where the claim for refund was hit by unjust enrichment. Additionally, the Tribunal found that a decision in the respondent's own case was not applicable as there was no refund claim filed in that instance. Consequently, the matter was remanded back to the adjudicating authority to determine if the respondents owed any duty after adjusting the excess duty paid. The issue of unjust enrichment was to be decided based on relevant precedents, while keeping all other issues open.

In conclusion, the appeals were allowed by way of remand, and the Cross Objection filed by the respondent was disposed of accordingly. The Tribunal's decision highlighted the importance of properly considering refund claims for excess duty paid and ensuring compliance with the principle of unjust enrichment in such cases.