2016 (12) TMI 1364 - AT - Customs

Unjust enrichment - whether the refund arising out of provisional assessment prior to 13-07-2006 would be hit by the doctrine unjust enrichment? - Held that - reliance placed on the decision of the case of case of CCE, Kandla Vs Hindustan Zinc Ltd 2009 (2) TMI 100 - CESTAT AHMEDABAD , where it was held that when provisional assessment is finalized, the assessee is entitled to refund and he does not have to make the claim, the provisions of Section 27 is not attracted. In the present case, as the period involved is prior to 13-07-2006, the refund is not hit by the doctrine of unjust enrichment - appeal rejected - decided against Department.

Summary

Issues:
1. Whether the refund arising out of provisional assessment prior to 13-07-2006 would be hit by the doctrine of unjust enrichment.

Analysis:
The appeal was filed by the department challenging the order passed by the Commissioner (Appeals) allowing the refund claimed by the respondent. The appellant imported Iron Ore concentrate and faced various orders and appeals leading to a refund claim for excess paid duty. The refund was sanctioned but directed to be credited to the Consumer Welfare Fund due to concerns of unjust enrichment. The appellant then appealed to the Commissioner (Appeals) who allowed the refund claim, leading to the current appeal.

The department argued that the refund arising from finalization of provisional assessment under Section 18 of the Customs Act must not be hit by unjust enrichment. They contended that the appellant failed to establish this, and the refund should have been credited to the Consumer Welfare Fund. On the other hand, the respondent's counsel referred to Section 18 of the Customs Act and cited relevant case law to support their position that the issue was settled in favor of the respondent.

The Commissioner (Appeals) extensively discussed the introduction of Section 18 into the Customs Act and referred to judgments such as Hindalco Industries Ltd case by the High Court of Gujarat. The court dismissed the Revenue's appeal, emphasizing that the doctrine of unjust enrichment does not apply to refunds arising before 13-07-2006. This view was supported by judgments from various High Courts and the Tribunal, leading to the conclusion that the refund in this case was not hit by the doctrine of unjust enrichment. Therefore, the department's appeal was dismissed, and the cross objections were disposed of accordingly.