2015 (12) TMI 925 - AT - Customs

Denial of refund claim - Unjust enrichment - whether the appellant is eligible for the refund of Customs duty paid by them - Held that - Appellant had produced Chartered Accountant s certificate wherein it was clearly mentioned that on going through the records, invoices, etc. Chartered Accountant had found that they had not passed on the higher rate of duty suffered by them. In the balance sheet also, as per the original authority s observation, the appellant had shown the amount as receivable from Customs. The eligibility for the refund arose because between the time of Bill of Entry and time of removal, tariff value got changed and therefore, within such a short interval, the appellant could have decided to transfer the liability and claim refund is also not reasonable. When the refund claim arises within two or three days and within 15 days, a refund claim is filed, the obvious conclusion would be that the appellant was clearly aware that by the time, the crude palm oil got processed and cleared; the actual duty suffered to them was known to them. More over in this case on merits also, the appellant was eligible for refund. Further they were not selling the goods as such but they were processing the same and thereafter selling. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Eligibility for refund of Customs duty paid by the appellant
- Unjust enrichment dispute

Eligibility for Refund of Customs Duty:
The primary issue in the case was whether the appellant was entitled to a refund of Customs duty paid by them due to a change in tariff value between the filing of the Bill of Entry and the clearance of goods. The appellant had filed two refund claims, and it was undisputed that they were eligible for the refund on merits. The dispute centered around the concept of unjust enrichment.

Unjust Enrichment Dispute:
The appellant's authorized representative highlighted that a Chartered Accountant's certificate confirmed that the appellant had not passed on the higher rate of duty to anyone else. The appellant had also shown the amount as receivable from Customs in their balance sheet. The short interval between the change in tariff value and the filing of the refund claim indicated that the appellant was aware of the duty suffered by them. Additionally, the appellant was engaged in processing the goods before selling them, further supporting their claim for a refund. The tribunal concluded that the appellant was indeed eligible for the refund, setting aside the impugned orders and allowing the appeals with any consequential relief.

The judgment delivered by the tribunal, through Member (T), concluded that the appellant met the criteria for a refund of Customs duty based on the evidence presented, including the Chartered Accountant's certificate and the appellant's business operations involving processing goods before sale. The decision emphasized the importance of considering unjust enrichment in such cases and highlighted the appellant's awareness of the duty suffered, leading to the conclusion that they were eligible for the refund.