2022 (2) TMI 151 - AT - Customs

Recovery of sanctioned refund of Rubber cess paid - recovery sought on the ground that the Bill of Entry were neither reassessed nor assessment was modified in appeal proceeding and hence the refund was not maintainable - violation of principles of unjust enrichment - HELD THAT - As per the facts of the case, the bills of entry assessed at nil rate of duty. Subsequent to the final assessment of Bills of entry,the revenue has insisted for payment of Rubber Cess in cash on the imported rubber, consequently, the appellant have deposited the Rubber Cess through various challans. Since the Bills of entry were assessed at nil rate of duty, there is no issue arises out of the Bills of entry which can be challenged by the appellant. The bills of entry assessed can be challenged only in those cases where the duty was on a higher side and excess duty was not payable in order to claim the refund of such excess paid duty. The assessee is first required to challenge the bills of entry and consequential to outcome of the challenge to assessment the appellant become entitle for the refund - However, in the present case, admittedly the bills of entry were assessed at the nil rate of duty therefore, there was nothing exist to challenge in the Bills of entry. The rubber cess was paid by the appellant separately through challan only on insistence of the department. However, even such payment has not been assessed by the department therefore, as regard the payment of rubber cess there was neither any assessment nor any need to challenge the same therefore, in our considered view the learned Commissioner (Appeals) has wrongly held that the appellants were required to challenge the assessment of Bills of entry. There is no dispute that the rubber cess paid by the appellant was legally not payable therefore; the amount of rubber cess paid by the appellant under protest became refundable. This very same issue has been considered by the Hon ble Bombay High Court in the case of SESA GOA LTD. VERSUS COMMISSIONER OF CUSTOMS, GOA 2015 (5) TMI 879 - BOMBAY HIGH COURT , where it was held that when the assessment is at nil rate of duty any amount paid separately, for the purpose of the refund of the same the assessment of bills of entry need not be challenged. Principles of Unjust enrichment - HELD THAT - The appellant have clearly shown the amount of refund as receivable in their Books of Accounts and the same was reinforced by Chartered Accountant certificate. Therefore, the appellant have established that the incidence of rubber cess paid by them, and for which the refund was sought for, has not been passed on to any other person, accordingly, the refund is not hit by unjust enrichment. The appellant are entitled for the refund of Rubber cess paid by them - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Disposal of appeals as per directions from Gujarat High Court
- Exemption claim under Notification No. 96/2009-Cus for imported Natural Rubber
- Payment of rubber cess under protest and subsequent refund claim
- Challenge to assessment order and unjust enrichment
- Legal validity of assessment orders and refund claims
- Applicability of relevant case laws on assessment orders and unjust enrichment

Detailed Analysis:

1. Disposal of Appeals as per High Court Directions:
The Tribunal disposed of the appeals based on the directions from the Gujarat High Court to decide the assessee's appeal afresh on merit, setting aside the previous Final Order.

2. Exemption Claim and Payment of Rubber Cess:
The appellant, engaged in tire manufacturing, imported natural rubber under Advance Licence and claimed exemption under Notification No. 96/2009-Cus. Despite nil assessment of duty on bills of entry, the appellant was required to pay rubber cess in cash, which was done under protest. Subsequently, a refund claim was filed based on the order of Commissioner (Appeals) stating that the cess was not payable.

3. Challenge to Assessment Order and Unjust Enrichment:
The appellant's counsel argued that the assessment of rubber cess was not paid on the bills of entry and challenged the findings of the Commissioner (Appeals) regarding unjust enrichment. Citing relevant case laws, it was contended that the appellant had not passed on the amount of rubber cess paid, thus justifying the refund claim.

4. Legal Validity of Assessment Orders and Refund Claims:
The Tribunal noted that since the bills of entry were assessed at nil duty rates, there was no basis for challenging the assessment. The payment of rubber cess separately, not assessed by the department, did not require a challenge to the bills of entry. The Tribunal disagreed with the Commissioner (Appeals) on the requirement to challenge the assessment, supporting the appellant's claim for refund.

5. Applicability of Case Laws on Assessment Orders and Unjust Enrichment:
Referring to the judgment of the Bombay High Court, the Tribunal emphasized that in cases of nil assessment, challenging the bills of entry for refund was unnecessary. The Tribunal also analyzed the appellant's submission regarding unjust enrichment, concluding that the refund of rubber cess was justified based on the evidence provided.

6. Final Decision and Relief Granted:
After considering the submissions and records, the Tribunal set aside the impugned orders, allowing the appeals with consequential relief. The refund of rubber cess paid by the appellant was deemed admissible, and the recovery of the refund ordered by the Commissioner (Appeals) was overturned.

This comprehensive analysis covers the issues involved in the legal judgment, detailing the arguments presented by both parties, the Tribunal's reasoning, and the final decision rendered by the Appellate Tribunal CESTAT Ahmedabad.