2018 (2) TMI 1867 - AT - Customs

Refund claim - duty paid under protest - rejection of refund on the ground that the assessment order not challenged - Held that - The appellate authority has correctly held that the duty was paid under protest and further that there is no need to challenge the assessment order and the refund claim has rightly been filed. Unjust enrichment - Held that - The appellate authority has held that the incidence of duty has been passed on to the buyer - further, once the appellate Commissioner has held that the refund has properly been filed and the duty was paid under protest the appellate authority should have also considered the memorandum of understanding between the appellant and his supplier abroad as well as the DGFT letter dated 28.02.2012 permitting the import at 50US per SQM. The impugned order has simply rejected the appeal of the appellant after holding that the refund claim is barred by unjust enrichment. Once a refund is barred by unjust enrichment then it was incumbent upon the appellate authority to credit the said refund to Consumer Welfare Fund which has also not been done in the present case. The present case is required to be remanded back to the Commissioner with the direction to examine the issue of unjust enrichment - appeal allowd by way of remand.

Summary

Issues:
Refund claim for excess customs duty due to valuation dispute, duty paid under protest, unjust enrichment doctrine application.

Analysis:
The appeal challenged an order upholding the rejection of a refund claim for excess customs duty on imported marble slabs due to a valuation discrepancy. The appellants imported slabs, declared value at US$60 per SQM instead of US$50 per SQM, leading to higher duty payment. The DGFT notification increased the value cap to US$60 per SQM, prompting the declaration change. The appellants argued the imported goods' agreed price was US$50 per SQM, supported by a notarized MOU and an irrevocable letter of credit. Despite this, the refund claim was rejected on grounds of non-protest duty payment and unjust enrichment, as the duty burden was allegedly passed on to customers. The appellate authority reversed some findings but upheld the rejection based on unjust enrichment, disregarding CA certificate defects and relevant DGFT letters. The appellant cited precedents to challenge the unjust enrichment bar, emphasizing compliance with import limits.

The appellant contended that the impugned order failed to consider crucial facts and laws, highlighting reversals by the appellate authority and reliance on precedents like Micromax Informatics and Aman Medical Pvt. Ltd. to support the protest duty payment and refund claim filing. The appellate authority's decision on unjust enrichment was disputed, arguing that duty burden passing was not proven and essential documents like the MOU and DGFT letter were overlooked. The absence of Consumer Welfare Fund credit for barred refunds was noted, along with the failure to address appellant's cited decisions opposing the unjust enrichment bar. The judgment remanded the case for reevaluation, directing the Commissioner to reconsider unjust enrichment in light of appellant's evidence, including financial records. Ultimately, the appeal was allowed for remand, emphasizing the need for a thorough review of unjust enrichment implications based on the appellant's submissions and additional evidence.