2014 (11) TMI 23 - AT - Customs

Refund of interest - Unjust enrichment - Payment of interest under protest - Held that - appellant has paid the interest for the period of the goods warehoused as per Section 61(2) of the Customs Act, 1962. Therefore, as per Circular No. 475/39/90-Cus VII dated 08.08.1990, provisions of Section 27 is not applicable to the facts of the case and consequently bar of unjust enrichment is not applicable. The same view was taken by this Tribunal in the case of Amtrex Hitachi App. Ltd. (2008 (1) TMI 81 - CESTAT, MUMBAI). Therefore, following the decision in the case of Hitachi App. Ltd. (2008 (1) TMI 81 - CESTAT, MUMBAI) I hold that the appellant is not required to pass bar of unjust enrichment and is entitled for refund claim of interest. Therefore, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Refund of interest requiring passing the bar of unjust enrichment.

Analysis:
The appellant imported S.S. Tubes under an 'Into Bond Bill of Entry' for warehousing without the necessary import license, leading to the department demanding interest for the warehousing period. The appellant paid the interest under protest and later sought a refund, which was denied by lower authorities citing unjust enrichment. The appellant argued that as per Section 129 of the Customs Act, unjust enrichment should not apply to interest refunds. They also referenced a CBEC Circular and a previous case to support their position.

The Tribunal noted that the appellant had indeed paid interest under Section 61(2) of the Customs Act, and as per Circular No. 475/39/90-Cus VII, the provisions of Section 27 regarding unjust enrichment did not apply in this case. Citing a previous decision, the Tribunal ruled that the appellant was entitled to the refund claim of interest without having to pass the bar of unjust enrichment. Consequently, the impugned order was set aside, and the appeal was allowed with directions for the adjudicating authority to implement the order within 30 days.

This judgment clarifies the applicability of unjust enrichment in cases of interest refunds under the Customs Act, emphasizing that specific provisions and circulars can override general principles. The decision provides a clear precedent for similar cases where interest payments are made under specific sections of the law, offering guidance on the refund process and the requirement of passing the bar of unjust enrichment.