2015 (3) TMI 165 - AT - Customs

Denial of refund claim - Unjust enrichment - Held that - This is a matter which should not have travelled to this Tribunal at all. The original adjudicating authority had acted correctly. It has to be noted that refund claim has been made immediately and refund received within the financial year and therefore, question of showing it as expenditure would not arise at all. It cannot also be shown as receivable since the original adjudicating authority sanctioned the refund on 14/12/2012. The importation took place on 7/9/2012. The second payment was made on the advice of department and because of the helplessness of the department to connect payment earlier made to the Bill of entry and make the computer system facilitate clearance of goods. In such a situation, requiring the appellant to prove unjust enrichment is against the spirit of law. Learned Commissioner (Appeals) observed that the assessee has to prove that there was no unjust enrichment beyond any doubt. - Here the Commissioner is requiring an importer to prove beyond any doubt that there is no unjust enrichment when there is a clear case of double payment and the problem that has arisen in the computerized system of the department and inability of the department to help an importer not to make second payment. No importer would be happy to make the second payment and claim refund. For three months, more than ₹ 80 lakhs have been with the Government for which no interest is payable. We find absolutely no justification to uphold the impugned order. - Decided in favour of assessee.

Summary

Issues: Delay in filing appeal, Refund claim for excess duty paid, Unjust enrichment

Delay in filing appeal:
The judgment addresses a delay of 17 days in filing the appeal due to the order being misplaced among other files. The delay was condoned by the Tribunal considering the circumstances.

Refund claim for excess duty paid:
The case involves a refund claim for excess duty paid by the importer due to a system error in the ICES. The importer made a second payment based on advice from ICEGATE helpdesk, leading to a double payment situation. The original adjudicating authority sanctioned the refund, but the Revenue appealed against this decision. The Commissioner (Appeals) rejected the refund on the grounds of unjust enrichment, requiring the claimant to prove that the duty incidence was not passed on to any other person.

Unjust enrichment:
The Tribunal found that the matter should not have reached them as the original adjudicating authority had acted correctly in sanctioning the refund. The Tribunal disagreed with the Commissioner (Appeals) on the requirement to prove unjust enrichment beyond any doubt, likening it to a higher standard of proof than in criminal cases. The Tribunal emphasized the importer's prompt refund claim, the system error causing the double payment, and the unfairness of expecting the importer to prove unjust enrichment in this context. The appeal was allowed, with the Tribunal noting that the litigation should not have occurred after the original authority sanctioned the refund.