2016 (5) TMI 1338 - AT - Customs

Refund claim - bank guarantee furnished in compliance with N/N. 49/2000-Cus., dated 27th April, 2000 for imports under the Export Promotion Capital Goods (EPCG) scheme that had been prematurely encashed by the proper officer of Customs without awaiting the Export Obligation Discharge Certificate (EODC) under consideration with the competent licensing authority - it was the claim of Revenue that there is no record of application for refund dated 2nd October, 2009 having been received in the Customs House. Held that - This is a matter that can be resolved on the facts available in the records. Appellant has furnished the application for refund submitted to New Customs House Mumbai along with the covering letter. I find from the covering letter that there is a clear date stamp on it. The date of the stamped acknowledgement of receipt by the EPCG unit is 20th October, 2009 and the endorsement states clearly that copy of EODC not received. - Failure to enclose discharge certificate is, undoubtedly, a deficiency and may render the application incomplete but it does not detract from the existence of the refund application. The acknowledgement with date stamp authenticates the application. The application was certainly made within time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dispute over refund of bank guarantee encashed prematurely.
2. Claim for refund denied by Commissioner of Customs (Appeals) on the ground of limitation.
3. Applicability of 'unjust enrichment' principle in the case of encashed bank guarantee.

Analysis:
1. The appellant, M/s. Sanderson Group (I) Pvt. Ltd., contested the order setting aside the refund sanctioned for a bank guarantee encashed prematurely. The refund amount of &8377; 5,49,751/- was related to imports under the Export Promotion Capital Goods (EPCG) scheme. The encashment occurred before the Export Obligation Discharge Certificate (EODC) was issued by the competent authority.

2. The dispute revolved around the timing of the refund application. The Revenue claimed that there was no record of the refund application before the Customs House before the issuance of the EODC. The first appellate authority sided with Revenue, citing the absence of a dated signature on the claim submitted in October 2009. The appellant, however, presented evidence of the application with a clear date stamp of receipt by the EPCG unit on 20th October 2009, countering the Revenue's argument.

3. The Tribunal found that while the failure to enclose the discharge certificate made the application deficient, the acknowledgment with a date stamp validated the timely submission of the refund claim. It was established that the application was made within the stipulated time. Moreover, the encashment of the bank guarantee did not imply duty payment at the time of clearance, as the imports were capital goods at a concessional duty rate. Therefore, the principle of 'unjust enrichment' did not apply in this scenario. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.