2018 (2) TMI 1795 - AT - Customs

Refund of excess duty paid - unjust enrichment - demand of Interest - Held that - In the absence of any other contrary evidence to show that the excess amount paid by the appellant is recovered from anyone, the impugned order holding that the doctrine of unjust enrichment has not been satisfied, is incorrect and impugned orders are liable to be set aside. Refund of Interest - Held that - Both the lower authorities have not considered the issue in its correct perspective, as the amount of interest which has been paid by the appellant is due to faulty assessment of imported goods - the interest liability which has been demanded when the consignment was cleared was not due and is not correct - the interest paid by appellant which has been charged by Revenue, needs to be refunded to appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved: Refund claim of excess duty paid along with interest eligibility for refund, application of doctrine of unjust enrichment, refund of interest paid due to faulty assessment of imported goods.

Analysis:

Issue 1: Refund Claim Eligibility
The appellant, a manufacturer of bulk drugs, imported raw materials and declared a value which was later re-determined by the assessing officer. The appellant successfully challenged the enhanced value before the first appellate authority, and the transaction value was accepted. The appellant paid customs duty based on the re-determined value under protest. The adjudicating authority allowed the refund claim but credited it to the Consumer Welfare Fund. The first appellate authority acknowledged the appellant's eligibility for refund but raised concerns about passing on the amount to the price of final products. The Tribunal found that the doctrine of unjust enrichment was not satisfied as per the Chartered Accountant's certificate provided by the appellant, showing the amount as receivable from the Customs department and not passed on to any person.

Issue 2: Refund of Interest
Both lower authorities did not consider the issue of interest refund correctly. The interest paid by the appellant was due to faulty assessment of imported goods. The appellant discharged the differential customs duty with interest under protest and later succeeded in proving the correctness of the declared transaction value. The Tribunal held that the interest liability demanded during clearance was not due and should be refunded to the appellant. The interest paid by the appellant, charged by the Revenue, needs to be refunded considering the circumstances of the case.

In conclusion, the Tribunal set aside the impugned orders, allowing the appeal and holding that the appellant justified not passing on the burden of the refund amount to any other person. The appeals were allowed with consequential relief, emphasizing the refund eligibility and the incorrect application of the doctrine of unjust enrichment.