2020 (1) TMI 1234 - AT - Customs

Interest on belated refund - doctrine of unjust enrichment - case of learned commissioner is that the adjudicating authority had not scrutinized the issue with the help of documentary evidences that the principles of bar of unjust enrichment had been crossed or not - HELD THAT - For non-submission of proper documentary evidences, the adjudication order dated 05.10.2011 was set aside by the learned Commissioner (Appeals). The appellant also failed to produce any such evidences at this juncture to demonstrate that the excess paid duty had been borne by it and not passed on to any other person. Sub-section (2) of Section 27 of the Customs Act, 1962 mandates that if the amount is refundable to the claimant, then the same may be credited to the CWC. However, the proviso clause contained therein permits grant of refund to the claimant/applicant, if the incidence of duty amount has not been passed on to any other person and the same has been borne by it - In this case, it is an admitted fact of record that the appellant did not submit the evidence either before the Commissioner (Appeals) or before this Tribunal to substantiate its claim that it had suffered the duty incidence by itself and not passed on the same to the buyers or any other person. Thus, as per the statutory mandates, the appellant should not be eligible for the benefit of refund and in such an eventuality; the amount of refund should appropriately be credited to the CWF. There are no substance in the appeals filed by the appellant that the amount of refund should be paid to it - appeal dismissed.

Summary

Issues:
1. Dispute over provisional duty assessment and refund of excess paid duty.
2. Application of the doctrine of unjust enrichment.
3. Failure to provide documentary evidence.
4. Eligibility for refund and crediting to Consumer Welfare Fund (CWF).
5. Request for recalling the order.

Analysis:
1. The case involved a dispute regarding the provisional duty assessment on imported cloves by M/s Ajay Exports. The appellant contested the grade of the goods, leading to a refund of excess paid duty. However, the original authority credited the excess amount to the Consumer Welfare Fund (CWF) due to alleged unjust enrichment. The Commissioner (Appeals) directed the refund to the appellant, which was further challenged.

2. The issue of unjust enrichment was central to the case. The appellant failed to demonstrate that the duty incidence was not passed on to others, as required by Section 27 of the Customs Act, 1962. The absence of documentary evidence supporting the appellant's claim led to the dismissal of the appeal. The statutory provisions mandated that if duty had been passed on, the refund should be credited to the CWF, as per the proviso clause.

3. The failure to provide proper documentary evidence was a critical factor in the judgment. The Commissioner (Appeals) set aside the adjudication order due to the lack of substantiating evidence from the appellant. The appellant's inability to prove that the excess duty was borne by them and not transferred to others weakened their case significantly.

4. The eligibility for the refund and the question of crediting it to the CWF were thoroughly examined. The judgment emphasized that without evidence proving that the duty incidence was not passed on, the appellant was not entitled to the refund. As the appellant did not meet the statutory requirements, the refund was deemed inappropriate, and the amount was directed to be credited to the CWF.

5. Lastly, the appellant's application for recalling the order was dismissed. The Tribunal held that once an order was pronounced and parties were present, it could not be recalled. The only recourse left was to appeal the order at the appropriate forum. Therefore, the request for recalling the order was deemed improper and not justified.

In conclusion, the appeals filed by the appellant were dismissed, upholding the impugned order. The judgment reiterated the importance of providing documentary evidence to support claims, especially in cases involving duty assessment and refund disputes.