2011 (6) TMI 96 - AT - Customs

Provisional assessment - Principal of unjust enrichment - since the goods in question on which duty was paid, were consumed by the tug, there was no scope for passing on the duty burden as there was no customer in this case - Tribunal in its judgment in CC Kandla Vs. Hindustan Zinc Ltd. (2009 -TMI - 33285 - CESTAT AHMEDABAD) has laid down that prior to amendment of Section 18 w.e.f. 13.7.06, refund, which became due to final assessment, did not attract the provisions of unjust enrichment - Decided in the favour of assessee

Summary

Issues:
1. Application of unjust enrichment principle to refund claims arising from finalization of provisional assessments made prior to 13.7.06.
2. Dispute regarding passing on the duty burden in the absence of a customer.

Issue 1: Application of Unjust Enrichment Principle:
The case involved a dispute over the application of the unjust enrichment principle to a refund claim arising from the finalization of a provisional assessment made before 13.7.06. The appellant had filed a Bill of Entry for assessment of fuel and provisions consumed by a tug during a towing operation. The duty was provisionally assessed and later finalized. The appellant claimed a refund after a Tribunal decision, but the amount was ordered to be credited to the Consumer Welfare Fund due to doubts about duty incidence. The Commissioner(Appeals) set aside this decision, citing precedents like CC Vs. Hindalco Industries Ltd. 2008 and CC Kandla Vs. Hindustan Zinc Ltd. 2009, which held that unjust enrichment did not apply to refunds from pre-13.7.06 assessments. The Tribunal upheld this decision, noting the absence of any dispute about the assessment date and the binding nature of the cited judgments.

Issue 2: Duty Burden Passing in Absence of Customer:
Another ground of appeal raised by the respondents was the absence of a customer to pass on the duty burden as the goods were consumed by the tug. The Commissioner(Appeals) addressed this by considering the date of provisional assessment, which was before 13.7.06. Relying on the judgments in CC Vs. Hindalco Industries Ltd. 2008 and CC Kandla Vs. Hindustan Zinc Ltd. 2009, the Commissioner held that the unjust enrichment principle did not apply to pre-amendment assessments. The Revenue did not dispute the decision but mentioned that the department had not accepted it and filed an appeal. However, as there was no stay on the Tribunal's order, the Commissioner's decision was upheld, and the appeal by the Revenue was rejected.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Ahmedabad addressed the issues of unjust enrichment in refund claims from pre-13.7.06 assessments and the duty burden passing in the absence of a customer. The decision relied on significant precedents and highlighted the binding nature of the judgments cited. The Tribunal's rejection of the Revenue's appeal affirmed the Commissioner(Appeals)'s decision, settling the matter in favor of the respondent.