2010 (3) TMI 823 - HC - Customs

Unjust enrichment Whether Tribunal is justified in confirming the order of the Commissioner (Appeals), inter alia, holding that examination of the issue in case of erroneously refunded duty amount under Section 28 of the Customs Act, 1962 on the Doctrine of Unjust Enrichment would amount to review of order of the adjudicating authority sanctioning the refund - adjudicating authority was of the view that the doctrine of unjust enrichment had not been examined while making the order of refund, the proper course to adopt was to take recourse to the provisions of Section 129D Held that - Commissioner (Appeals) was justified in holding that the show cause notice issued by the adjudicating authority on the ground of unjust enrichment, would amount to review of his own order which was not permissible, order of the Tribunal whereby it has confirmed the findings recorded by the Commissioner (Appeals) does not suffer from any legal infirmity so as to warrant interference. No question of law, much less any substantial question of law can be stated to arise out of the impugned order of the Tribunal, appeal is accordingly dismissed.

Summary

Issues:
1. Jurisdiction of adjudicating authority in confirming customs duty demand.
2. Doctrine of Unjust Enrichment in refund cases.
3. Review of orders by adjudicating authority.

Analysis:
1. The appeal under Section 130 of the Customs Act challenged the Tribunal's order confirming the adjudicating authority's decision on customs duty demand against a respondent holding a 100% EOU license. The Commissioner (Appeals) set aside part of the demand but upheld confiscation and redemption fine. The respondent applied for refund, which was partially granted. Subsequently, a show cause notice was issued questioning the refund due to unjust enrichment, leading to another order sanctioning refund to the Consumer Welfare Fund. The Commissioner (Appeals) held that issuing a second show cause notice amounted to reviewing the earlier order, which was impermissible. The Tribunal upheld this decision, emphasizing the need to follow proper procedures under the Act.

2. The adjudicating authority's actions in issuing a show cause notice post-refund sanction were scrutinized for compliance with the doctrine of unjust enrichment. The Commissioner (Appeals) correctly noted that the authority should have used Section 129D provisions for review instead of issuing a new notice. The Tribunal affirmed this stance, emphasizing the adherence to statutory procedures and rejecting the appeal based on legal grounds. The Tribunal's decision was deemed legally sound, with no substantial question of law arising from it.

3. The Tribunal's decision was based on the correct interpretation of the law, as the adjudicating authority's attempt to reconsider its earlier order was found to be beyond its statutory powers. The Commissioner (Appeals) rightly pointed out the proper course of action for the Department in such situations, highlighting the need to follow the prescribed appeal procedures under Section 129D of the Act. The Tribunal's affirmation of the Commissioner's decision was deemed legally valid, leading to the dismissal of the appeal without costs. Additionally, a related civil application was disposed of in light of the main Tax Appeal's outcome.