2021 (3) TMI 690 - HC - Customs

Refund claim - Principles of unjust enrichment - Certificate of Chartered Accountant - sufficient and conclusive proof or not, that the incidence of duty has not been passed on - provisional assessment for the period prior to 14.07.2006 - scope of unjust enrichment on Public Sector Undertakings - applicability of Section 27 of Customs Act, 1962 are not applicable to the Public Sector Undertakings. HELD THAT - Admittedly, the claim for refund which was made by the assessee arises out of the order of provisional assessment for the period prior to 14.07.2006. The issue whether the public sector undertakings are outside the purview of unjust enrichment is concerned, the same is no more res integra and has already been adjudicated in Mafatlal Industries Limited Vs. Union of India, 1996 (12) TMI 50 - SUPREME COURT , wherein the Supreme Court has held that The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched. Thus, the doctrine of unjust enrichment is not applicable to the case of public sector undertakings - In view of this answer, it is not necessary to deal with the other substantial question of law regarding certificate of Chartered Accountant. Appeal dismissed.

Summary

Issues:
1. Applicability of unjust enrichment in cases of provisional assessment and public sector undertakings for refund of excess duty under Section 18 of the Customs Act, 1962.

Analysis:

1. The appellant filed an appeal under Section 130(A) of the Customs Act against an order by the Customs, Excise and Service Tax Appellate Tribunal. The appeal raised substantial questions of law regarding the Certificate of Chartered Accountant as proof of duty incidence and the applicability of Section 27 of the Customs Act to Public Sector Undertakings.

2. The respondent, a Public Sector Undertaking, imported goods and claimed a refund of excess duty paid due to changes in price. The claim was rejected initially, but after appeals and orders, the refund was sanctioned but credited to the Consumer Welfare Fund. The respondent argued that as a Public Sector Undertaking, unjust enrichment principles did not apply to them.

3. The Tribunal and Commissioner (Appeals) decisions favored the respondent, citing a judgment that Public Sector Undertakings are exempt from unjust enrichment. The appellant contended that the provision for refund in the Act does not differentiate between private entities and public sector undertakings.

4. The main issue was the applicability of unjust enrichment to provisional assessments and public sector undertakings for refund of excess duty. The Supreme Court precedent established that unjust enrichment does not apply to the State or public sector undertakings, as they represent the people and cannot be unjustly enriched. Thus, the doctrine does not apply to public sector undertakings.

5. The Court concluded that the doctrine of unjust enrichment does not apply to public sector undertakings, based on the Supreme Court ruling. As a result, the appeal was dismissed, finding no merit in the appellant's arguments.

6. The judgment clarified the legal position on unjust enrichment concerning public sector undertakings and provisional assessments, providing a clear precedent for future cases involving similar issues under the Customs Act.

Conclusion:
The judgment established that the doctrine of unjust enrichment does not apply to public sector undertakings in cases of provisional assessments for refund of excess duty, as per the Supreme Court ruling. The appeal was dismissed based on this legal principle.