2017 (12) TMI 1038 - AT - Customs

Refund of Extra Duty Deposit (EDD) - denial on the ground of unjust enrichment - Held that - Tribunal in the case of SKF Technologies (I) Pvt. Ltd 2016 (11) TMI 986 - CESTAT BANGALORE , has held that EDD (extra duty deposit) made during the pendency of investigation by SVB is in the form of a security and the doctrine of unjust enrichment is not applicable for the refund of EDD - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against the order passed by Commissioner (A) upholding the rejection of refund claim for Extra Duty Deposit (EDD).
- Applicability of the doctrine of unjust enrichment to the refund claim.
- Interpretation of the nature of EDD as a deposit or duty.
- Comparison of various decisions to support the appellant's claim for refund.

Analysis:
The appeal was filed against the order of the Commissioner (A) upholding the rejection of the refund claim for EDD. The appellant, a subsidiary of a US company, imported goods for designing Integrated Circuits and provisionally cleared them during the pendency of Special Valuation Branch (SVB) investigation. The appellant sought a refund of EDD paid, which was rejected by the Original Authority, leading to the appeal. The Commissioner (A) partially allowed the refund, deducting an amount due to lack of original Bill of Entry and considering the EDD as an expense, not receivables, invoking the doctrine of unjust enrichment.

During the proceedings, the appellant argued that the impugned order was incorrect factually, as the entire refund amount was rejected by the Original Authority. The appellant relied on legal precedents to support their claim for automatic refund of EDD upon finalization of the Bill of Entry, emphasizing that the EDD was a deposit, not a duty, citing relevant decisions. Additionally, the appellant contended that the doctrine of unjust enrichment applies only to duty, not deposit, and thus, the refund claim for EDD should not be subject to this doctrine, supported by further legal references.

After considering the arguments from both parties and reviewing the case law, the Tribunal found that the issue was settled in favor of the appellant by previous decisions. Specifically, referring to the SKF Technologies case, the Tribunal determined that EDD paid during SVB investigation is akin to a security deposit and not subject to the doctrine of unjust enrichment. Consequently, the impugned order was set aside, and the appeal was allowed for the refund of the entire EDD amount. The Tribunal's decision was based on the established legal principles and precedents cited during the proceedings, providing relief to the appellant in line with the jurisprudence on the matter.