2018 (3) TMI 785 - HC - Customs

Refund of excess duty collected - short shipment of import cargo where the importer has failed to produce the documentary evidences - applicability of unjust enrichment - Held that - the excess payment of customs was on account of short import of goods. Primarily when the goods imported by an importer truned out to be in short quantity as compared to the export consignment the question of passing on the burden of customs duty on such quantity of goods would not arise - appeal dismissed.

Summary

Issues:
1. Applicability of the doctrine of unjust enrichment under section 27 of the Customs Act, 1962 to refunds in cases of short shipment of import cargo.
2. Tribunal's alleged error in not recording disagreement to the specific finding on unjust enrichment and short landing of LNG.
3. Tribunal's alleged error in applying a previous judgment without considering comparative facts and jurisdictional facts.

Issue 1 - Unjust Enrichment in Refunds:
The primary issue in the case revolves around the applicability of the doctrine of unjust enrichment under section 27 of the Customs Act, 1962 to refunds in cases of short shipment of import cargo. The department contended that there was insufficient evidence to prove that the duty element was not passed on to the ultimate consumer, hence refund should not have been granted based on the principle of unjust enrichment. However, the Tribunal, in contrast to the department's argument, ruled in favor of granting the refund. The Tribunal noted that the importer had provided a Chartered Accountant's certificate certifying that the customs duty element was not passed on to the customers. The Tribunal concluded that the issue was primarily factual, and no question of law arose in this regard. As a result, the Tax Appeal along with O.J.Civil Application was dismissed.

Issue 2 - Alleged Tribunal Error on Unjust Enrichment and Short Landing:
The second issue raised by the department pertained to the Tribunal's alleged error in not recording its disagreement with the specific finding on the applicability of unjust enrichment on short landing of LNG. The department argued that the Tribunal had failed to address this specific finding in the original order by the adjudicating authority. However, the judgment did not find merit in this argument, as it focused on the factual aspect of the case, particularly the evidence provided by the importer, rather than on the procedural aspect of the Tribunal's decision-making process.

Issue 3 - Alleged Tribunal Error in Applying Previous Judgment:
The final issue raised was the Tribunal's alleged error in applying a previous judgment without considering the comparative facts and jurisdictional facts of the case at hand. The department contended that the Tribunal should have provided findings on the jurisdictional facts specific to the case instead of relying solely on a previous judgment. The judgment did not delve deeply into this issue, as the primary consideration was the factual evidence presented by the importer regarding the passing on of the customs duty element to the customers. Consequently, the Tribunal's decision to grant the appeal without extensive comparative analysis was not deemed erroneous in this context.

In conclusion, the judgment focused on the factual aspects of the case, particularly the evidence provided by the importer regarding the passing on of the customs duty element to the customers. The Tribunal's decision to grant the refund was upheld, emphasizing the factual nature of the dispute and the evidence presented rather than procedural or jurisdictional considerations.