2019 (11) TMI 501 - AT - Customs

Refund of excess Customs duty paid - finalization of provisional assessment - Section 18(2) of the Customs Act, 1962 - unjust enrichment - HELD THAT - The doctrine of unjust enrichment is not applicable in the present case because the Shipping Corporation of India is a Public Sector Undertaking and in view of the Supreme Court decision in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT where it was held that in the case of Public Sector Undertaking, doctrine of unjust enrichment is not applicable. Further, the doctrine of unjust enrichment will not be applicable because the appellant is seeking only the refund of excess duty paid inter alia at the time of provisional assessment and when the assessment was finalized it was found that he has paid excess amount of ₹ 38,85,649/- which should have been refunded to him without issue of show-cause notice - Further both the authorities have examined in detail the application of the doctrine of unjust enrichment and has returned the categorical findings that doctrine of unjust enrichment is not applicable in the present case and the Shipping Corporation of India has not passed on the Customs duty to any other persons and has itself suffered duty. Also, the authorities have examined in detail the application of the doctrine of unjust enrichment and has returned the categorical findings that doctrine of unjust enrichment is not applicable in the present case and the Shipping Corporation of India has not passed on the Customs duty to any other persons and has itself suffered duty. There is nothing wrong in the impugned order which is upheld by dismissing the appeal of the Revenue - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Validity of refund claim related to Customs duty
2. Examination of the principle of unjust enrichment
3. Applicability of unjust enrichment in case of a Public Sector Undertaking
4. Proper assessment of excess duty payment and refund claim

Issue 1: Validity of refund claim related to Customs duty

The case involved a refund claim seeking the refund of excess payment made for Customs duty. The claimant filed a refund claim which was initially assessed provisionally, and upon finalization of assessment, an excess payment of &8377; 38,85,649/- was identified. The Assistant Commissioner of Customs sanctioned the refund, leading to a challenge by the Department on grounds of unjust enrichment. The Commissioner of Customs (Appeals) remanded the case to the original authority for examination.

Issue 2: Examination of the principle of unjust enrichment

The Department challenged the refund claim on the basis that the principle of unjust enrichment had not been properly examined. The original authority, after re-examination, held that the claimants had proven that the duty incidence had not been passed on to any other person. The Department, aggrieved by this decision, filed the present appeal.

Issue 3: Applicability of unjust enrichment in case of a Public Sector Undertaking

The key contention revolved around the applicability of the doctrine of unjust enrichment in the case of a Public Sector Undertaking, specifically the Shipping Corporation of India. The respondent argued that the doctrine of unjust enrichment was not applicable in this case, citing relevant decisions and the fact that the duty had not been passed on to any other person.

Issue 4: Proper assessment of excess duty payment and refund claim

The Tribunal, after hearing both parties and examining the submissions, found that the doctrine of unjust enrichment was not applicable in this case due to the nature of the claim and the involvement of a Public Sector Undertaking. The Tribunal upheld the impugned order, emphasizing that the Shipping Corporation of India had not passed on the Customs duty to any other person and had borne the duty itself. The Tribunal concluded that the appeal of the Revenue was dismissed as the grounds raised were not tenable in law based on the detailed examination of the doctrine of unjust enrichment and the specific circumstances of the case.

This judgment delves into the complexities of Customs duty refund claims, the examination of the principle of unjust enrichment, and the applicability of such principles in cases involving Public Sector Undertakings. The Tribunal's detailed analysis and reliance on relevant legal decisions showcase a thorough consideration of the facts and legal arguments presented by both parties, ultimately leading to the dismissal of the Revenue's appeal.