2011 (6) TMI 615 - AT - Customs

Refund unjust enrichment - amount credited to the Consumer Welfare Fund (CWF) Held that - both the lower authorities have applied the doctrine of unjust enrichment in case of fine and penalty of Rs.95,000/-. It is a settled law that doctrine of unjust enrichment would not apply to fine and penalty. Both the lower authorities have passed the order mechanically. matter requires reconsideration. appeal is allowed by way of remand.

Summary

Issues:
1. Crediting refund amount to Consumer Welfare Fund under the doctrine of unjust enrichment.
2. Applicability of unjust enrichment to fine and penalty.
3. Provisional assessment and payment of duty under protest through DEPB Scrip.

Analysis:
1. The appellant filed an appeal against the Order-in-Appeal crediting the refund amount to the Consumer Welfare Fund (CWF) under the doctrine of unjust enrichment. The lower adjudicating authority and the Commissioner (Appeals) upheld this decision based on the provisions of Section 27 of the Customs Act, 1962. The appellant argued that they made a provisional assessment and paid the duty under protest through DEPB Scrip, not cash. The learned JDR highlighted that the appellant failed to prove that the duty incidence was not passed on to customers, as per a Chartered Accountant's certificate. The case was remanded to the lower adjudicating authority for reconsideration and allowing the appellants to produce supporting documents.

2. The lower authorities' application of the doctrine of unjust enrichment to fine and penalty of Rs.95,000 was found to be incorrect. It was noted that unjust enrichment does not apply to fine and penalty amounts. The judgment emphasized that both lower authorities mechanically applied the doctrine without proper consideration. The matter was remanded for the lower adjudicating authority to reevaluate the issue, granting the appellants a reasonable opportunity of hearing. The judgment highlighted the need for a fresh decision within three months from the date of the order.

3. The appellant's argument regarding the provisional assessment and payment of duty under protest through DEPB Scrip was considered during the appeal. The appellant contended that this method of payment should exempt them from the doctrine of unjust enrichment. However, the focus of the judgment primarily revolved around the incorrect application of unjust enrichment to the fine and penalty amount, leading to the remand of the case for further review and consideration by the lower adjudicating authority. The judgment allowed the appellants to present additional documents to support their contentions during the reconsideration process.