2011 (9) TMI 515 - AT - Customs

Unjust Enrichment - Held that - In view of Board of Trustees of the Port of Mormugao Vs UoI - (1993 - TMI - 43628 - HIGH COURT OF JUDICATURE AT BOMBAY) Refund in respect of short landed goods arises and will not be covered by the provisions of Section 27 of Customs Act 1962.

Summary

Issues involved:
1. Refund claim of differential amount of Customs duty arising from finalization of provisional assessment.
2. Application of doctrine of unjust enrichment to the refund claim.
3. Appeal against the order crediting the refund amount to Consumer Welfare Fund.
4. Interpretation of Section 27 of the Customs Act, 1962 in relation to short landing of goods.

Analysis:

1. The appellant filed a refund claim for differential Customs duty due to finalization of provisional assessment of bills of entry for Liquified Natural Gas import. The adjudicating authority initially sanctioned the refund but ordered the amount to be credited to Consumer Welfare Fund based on unjust enrichment. The Commissioner (Appeals) partially allowed the refund claim but upheld the credit to the Fund, leading to the current appeal.

2. The main issue revolved around the application of the doctrine of unjust enrichment to the refund claim. The appellant argued that the refund related to short landing of goods, citing precedents where duty on short-landed goods was not considered under unjust enrichment. The Tribunal analyzed the provisions of Section 27 of the Customs Act and relevant case laws to determine that unjust enrichment did not apply to goods that were short received, ultimately setting aside the order crediting the amount to the Fund.

3. The appeal challenged the order of the first appellate authority upholding the credit of a specific amount to the Consumer Welfare Fund. The Tribunal reviewed the findings of the lower authorities and concluded that the refund claim for short-landed goods was admissible to the appellant, thereby allowing the appeal and providing consequential relief.

4. The Tribunal examined the provisions of Section 27 of the Customs Act in the context of short landing of goods. Citing judgments and precedents, it determined that the doctrine of unjust enrichment did not apply to goods that were short shipped or short landed. The Tribunal set aside the order crediting the refund amount to the Consumer Welfare Fund, emphasizing that the refund claim for short-landed goods was valid and should not be subject to unjust enrichment principles.

In conclusion, the Tribunal allowed the appeal, providing relief to the assessee by setting aside the order crediting the refund amount to the Consumer Welfare Fund and establishing that the doctrine of unjust enrichment did not apply to the refund claim related to short-landed goods.