2017 (8) TMI 91 - AT - Customs

Refund claim - excess amount of cess paid - communication of finalisation of assessment - Held that - no communication about finalization of assessment of the 20 Bills of Entry had been sent to the appellants. Therefore, the plea of the Revenue that refund cannot be sanctioned to the appellant as they have not challenged the said 20 finally assessed Bills of Entry, is not sustainable. Even though the adjudicating authority has recorded a finding on the issue of unjust enrichment, which though specifically assailed by the appellants before the ld. Commissioner (Appeals), however, the ld. Commissioner (Appeals) has not dealt the said issue in the impugned order. Therefore, on the issue relating to unjust enrichment both sides fairly agree that the said issue needs to be remanded to the ld. Commissioner (Appeals). Appeal allowed by way of remand.

Summary

Issues:
1. Refund claim rejection for coal cess on imported coal.
2. Communication of finalization of assessment for Bills of Entry.
3. Unjust enrichment criteria fulfillment for refund.

Issue 1: Refund claim rejection for coal cess on imported coal:
The appeal was filed against the rejection of a refund claim for coal cess on imported coal. The appellants, regular importers of coal for cement manufacturing, faced a demand for differential cess amounting to &8377; 28,60,717.34. The demand was dropped after adjudication, leading to a refund claim of &8377; 18,14,446/- for 22 Bills of Entry. The adjudicating authority rejected the refund claim for 20 Bills of Entry, prompting an appeal before the Commissioner (Appeals). The Commissioner denied the refund for 20 Bills of Entry but remanded the matter for two specific Bills of Entry. The appellant contended that the denial of refund for unchallenged Bills of Entry was incorrect, citing a Tribunal judgment. The Revenue argued that the appellants were aware of finalization of assessment for all Bills of Entry and failed to challenge them, making the refund claim untenable due to unjust enrichment concerns.

Issue 2: Communication of finalization of assessment for Bills of Entry:
The advocate for the appellants argued that they were not informed about the finalization of assessment for 20 Bills of Entry, hence could not appeal against them. The Revenue contended that communication was sent to the appellants regarding the finalization of assessment for all Bills of Entry. Upon review, it was found that no communication was sent to the appellants about the finalization of assessment for the 20 Bills of Entry. The Tribunal held that the plea of the Revenue, stating that refund cannot be granted due to lack of challenge on the assessed Bills of Entry, was not sustainable. The Tribunal cited a judgment to support this finding and set aside the rejection of refund for the 20 Bills of Entry.

Issue 3: Unjust enrichment criteria fulfillment for refund:
The Revenue argued that the refund was rightly rejected as the appellants failed to establish that the excess cess paid was not passed on to their customers, thus not meeting the unjust enrichment criteria. The appellants maintained that they had challenged the adjudicating authority's finding on unjust enrichment before the Commissioner (Appeals). The Tribunal noted that while the adjudicating authority addressed the issue of unjust enrichment, the Commissioner (Appeals) did not provide a ruling on this matter. Both parties agreed that the issue of unjust enrichment needed further examination. Consequently, the Tribunal set aside the impugned order and remanded the case to the Commissioner (Appeals) to evaluate the unjust enrichment issue and issue a finding after allowing the appellants an opportunity to present their case. The appeal was allowed for remand.

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