2015 (5) TMI 1092 - AT - Customs

Unjust enrichment - refund of ADD - whether the rejection of refund claim on the ground of unjust enrichment of the amount becoming due as refund on finalization of provisional assessment is correct? - Held that - the unjust enrichment doctrine can be invoked to deny the benefit to which a person is not otherwise entitled and further it was also held that this does not mean that in the absence of statutory provisions, a person can claim or retain undue benefit - In this case, there is a clear statutory provision which provides that he is entitled to refund. Further the concept of unjust enrichment was incorporated only on 13-7-2006. In the absence of any clear legislative intention emerging from the amendment that such an amendment would have retrospective effect. The rejection of refund claim on the ground of unjust enrichment is not correct - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the rejection of refund claim on the ground of unjust enrichment is correct.

Analysis:
1. The appellants imported gas coke under 8 Bills of Entry, which were provisionally assessed, and paid anti-dumping duty under protest. Upon finalization, it was discovered that the appellants had paid excess duty of Rs. 2,36,99,324. The refund was credited to the Consumer Welfare Fund due to lack of proof that the duty burden had not been passed on.

2. The main issue revolved around the rejection of the refund claim based on unjust enrichment. The appellants cited the decision of the Hon'ble High Court of Gujarat and a Larger Bench of the Tribunal, arguing that unjust enrichment provisions did not apply to Bills of Entry provisionally assessed before 13-7-2006. They also referred to a similar decision by the Hon'ble Supreme Court in a Central Excise case.

3. The Tribunal examined the relevant provisions of Section 18 of the Customs Act before and after the amendment on 13-7-2006. The pre-amendment version did not include provisions for crediting refund amounts to the Consumer Welfare Fund, which was introduced later.

4. The Tribunal found that the High Court of Gujarat's decision in a similar case was directly applicable. The Court had extensively analyzed the issue and considered relevant precedents, including a decision by the High Court of Bombay and the Supreme Court.

5. The Authorized Representative relied on a Supreme Court decision related to unjust enrichment based on equity. However, the Tribunal noted that the legal provisions in the present case were different from those in the cited case, emphasizing the applicability of the decisions favoring the assessee.

6. The Tribunal highlighted the Supreme Court's stance on unjust enrichment, stating that it can be invoked to deny undue benefits. However, in this case, where a clear statutory provision entitled the refund and the unjust enrichment concept was introduced post the relevant period, the Tribunal favored following decisions supporting the assessee.

7. Ultimately, the Tribunal concluded that the rejection of the refund claim on the basis of unjust enrichment was incorrect, allowing the appeal and granting consequential relief to the appellant.

This detailed analysis of the judgment showcases the application of legal principles, precedents, and statutory provisions in resolving the issue at hand regarding the rejection of a refund claim on grounds of unjust enrichment.