2010 (9) TMI 268 - AT - Customs

Unjust enrichment - refund claim has arisen out of finalization of provisional assessment - respondent became eligible for refund of differential duty - credited to the Consumer Welfare Fund on the ground that the obligation to prove that the amount was not passed on to the customer - Held that - prior to amendment of Section 18 of Customs Act, 1962 w.e.f. 13.7.06, refund which becomes due on finalization of provisional assessment, did not attract the provisions of unjust enrichment - Appeal is dismissed

Summary

Issues:
- Appeal against decision of Commissioner (Appeals) on unjust enrichment in refund sanctioning
- Application of Section 18 of Customs Act, 1962 to refund claims
- Interpretation of prior judicial decisions on unjust enrichment

Analysis:
1. The appeal before the Appellate Tribunal CESTAT Ahmedabad concerns the Revenue challenging the decision of the Commissioner (Appeals) regarding the application of unjust enrichment to a refund claim. The Commissioner had held that unjust enrichment applied, leading to the non-sanctioning of the refund.

2. The case revolves around a refund claim arising from the finalization of provisional assessment before the amendment of Section 18 of the Customs Act, 1962 on 13.7.06. The respondent became eligible for a refund of differential duty amounting to Rs.2,41,231 following the assessment of Bill of Entry No.1/99 dated 26.11.99.

3. Initially, the refund claim was allowed but was credited to the Consumer Welfare Fund as the respondent failed to prove that the amount was not passed on to the customer. Subsequently, the Commissioner (Appeals) allowed the refund after an appeal by the respondent, prompting the Revenue to appeal the decision.

4. The Appellate Tribunal noted that the Commissioner (Appeals) relied on the decisions of the Hon'ble High Court of Gujarat and the Tribunal's Larger Bench in specific cases, establishing that prior to the amendment of Section 18, the unjust enrichment provision did not apply to refunds from finalization of provisional assessments. The Revenue contested these decisions, claiming they were under challenge.

5. The Tribunal, observing the absence of evidence showing a stay on the decisions by higher courts, found no merit in the Revenue's appeal. Consequently, the appeal was rejected, affirming the application of prior judicial interpretations regarding unjust enrichment in the context of refund claims before the amendment of Section 18 of the Customs Act, 1962.