2018 (6) TMI 648 - AT - Customs

Refund of Customs Duty - finalization of provisional assessment - duty paid under protest - applicability of the benefit of N/N. 21/2002 (Sl. No. 313) to the products in respect of past consignments - consignments of fixed wireless telephone - refund was rejected on the ground of unjust enrichment - Held that - The direction of the Commissioner (Appeals) remanding the matter for examining the issue of unjust enrichment does not call for any interference - In the case of Hindalco Industries 2008 (9) TMI 71 - HIGH COURT GUJARAT , the Hon ble High Court of Gujarat held that Section 18 of the Customs Act amended from 13.7.2006 making unjust enrichment applicable to refund claims arising out of finalization of provisional assessment does not have retrospective effect - appeal dismissed - decided against appellant.

Summary

Issues:
1. Classification of imported products under Customs Tariff Act.
2. Benefit of exemption under Customs Notification No. 21/2002.
3. Refund of excess customs duty paid by appellant.
4. Examination of the issue of unjust enrichment by the Commissioner (Appeals).
5. Application of Section 18(5) of Customs Act, 1962 to refund claims.
6. Arguments presented by the appellant and the department.
7. Judicial interpretation and application of relevant legal principles.

Analysis:

1. Classification of Imported Products:
The appellants imported fixed wireless telephones and claimed classification under sub-heading 85252017 of Customs Tariff Act, 1974 with reference to Customs Notification No. 21/2002. The dispute over classification was resolved by the Supreme Court, which confirmed eligibility for exemption under the notification.

2. Benefit of Exemption:
Following the Supreme Court's judgment, the appellants sought refunds for excess customs duty paid. The refund claims were allowed for certain periods but disputed for others, leading to appeals before the Commissioner (Appeals) to examine the issue of unjust enrichment.

3. Refund of Excess Customs Duty:
Refund applications for various periods were allowed or rejected based on the Commissioner (Appeals)'s assessment of unjust enrichment. The department appealed against the sanction of refunds, leading to remands for further examination.

4. Examination of Unjust Enrichment:
The Commissioner (Appeals) remanded the matter to the adjudicating authority to consider whether the incidence of duty had been passed on to others, as per Section 18(5) of the Customs Act, 1962. The appellant contested this remand, arguing against the retrospective application of the provision.

5. Application of Section 18(5):
The appellant contended that the introduction of Section 18(5) should not apply retrospectively to refund claims filed before its enactment. The department argued that the provision should apply to final assessments conducted after its introduction, justifying the remand for examination of unjust enrichment.

6. Arguments Presented:
The appellant's counsel argued against the remand, citing evidence that duty incidence was not passed on and challenging the retrospective application of Section 18(5). The department's representative supported the remand, emphasizing the need to establish non-passing of duty burden to others.

7. Judicial Interpretation:
The Tribunal dismissed the appeals, upholding the Commissioner (Appeals)'s decision to remand for unjust enrichment examination. Citing the Scientific Instruments case, the Tribunal found no infirmity in the remand order, despite the debate on the retrospective application of Section 18(5) and the principles of unjust enrichment as established by legal precedents.

This comprehensive analysis highlights the key issues, arguments, and judicial interpretation involved in the legal judgment concerning classification, exemption, refund claims, unjust enrichment, and the application of relevant legal provisions in the context of customs duty disputes.