2018 (6) TMI 528 - AT - Customs

Refund of Customs Duty paid - unjust enrichment - case of appellant is that their final product price is also LME based and has no relation to the cost of the raw materials including the customs duty paid by them - whether grant of such refund would result in unjust enrichment to the assessee or not? - Held that - The said issue stands considered by the Hon ble Supreme Court in the case of State of Rajasthan & Others Vs. Hindustan Copper Ltd., 1997 (11) TMI 516 - SUPREME COURT OF INDIA , laying down that where the price of the copper is fixed by MMTC on the basis of the prevailing price fixed by the LME, the unjust enrichment angle will not be involved - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Disposition of appeals with identical issues
- Reversal of original adjudicating authority's order in favor of the appellant
- Upholding of original adjudicating authority's order in two appeals
- Rejection of Revenue's appeal by Commissioner (Appeals)
- Import of copper concentrates for manufacturing copper products
- Conversion of provisional invoices into final invoices
- Refund claims filed by the importer
- Scrutiny of refund claims by original adjudicating authority
- Consideration of unjust enrichment principle
- Comparison with relevant legal precedents
- Final product pricing based on LME prices
- Applicability of unjust enrichment angle
- Decision based on previous rulings

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai, delivered by Smt. Archana Wadhwa and Shri V. Padmanabhan, Member (Technical), resolves four appeals with similar issues. The Commissioner (Appeals) reversed the original adjudicating authority's order in one appeal, leading to the appellant's filing of the present appeals. In the other two appeals, the original adjudicating authority's order was upheld. The Revenue's appeal was rejected by the Commissioner (Appeals), prompting the Revenue to appeal before the Tribunal. The appeals revolve around the appellant, a manufacturer of copper products, importing copper concentrates as raw material. The cost of copper concentrate is determined by LME prices, with provisional invoices converted into final ones after a few months, affecting duty payments and refund claims. The central issue is whether granting refunds would result in unjust enrichment for the appellant.

The Tribunal's analysis involves scrutinizing the factual aspects of importing goods and paying duty on a provisional basis, subsequently finalized by the Revenue. The key dispute centers on the potential unjust enrichment for the appellant. Legal precedents, including the case of State of Rajasthan vs. Hindustan Copper Ltd., and Hindustan Copper Ltd. vs. Commissioner of CE, Jaipur, are referenced to determine the unjust enrichment angle. These cases establish that if the final product price is based on LME prices, unjust enrichment is not applicable, as duty burden is not passed on to buyers. The Tribunal concludes that as the unjust enrichment issue is the core concern in the appeals and has been addressed by previous decisions, the Revenue's stance lacks merit. Consequently, the appeals by the appellants are allowed, while the Revenue's appeal is rejected.

In summary, all four appeals are disposed of accordingly, emphasizing the importance of final product pricing based on LME prices in determining the applicability of the unjust enrichment principle. The judgment highlights the relevance of legal precedents in resolving issues related to duty payments, refund claims, and unjust enrichment in the context of importing raw materials for manufacturing final products.