2023 (7) TMI 1252 - HC - Customs

Refund of Customs Duty - Principles of unjust enrichment - applicability to Public Sector Undertakings with regards to excess paid duties arising out of finalization of provisional assessment in terms of section 18 read with section 27 of the Customs Act 1962 - HELD THAT - A solitary contention with regard to unjust enrichment was urged before the CESTAT. Following the authority in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT the CESTAT has rightly held that the Doctrine of unjust enrichment shall not be applicable in the case on hand as the claimant is a PSU. Applicability of Doctrine of unjust enrichment is applicable to PSUs - HELD THAT - No material is placed to show that the view taken in Mafatlal Industries has been reversed/modified. Both, Commissioner (Appeals) and the CESTAT have considered the principle of unjust enrichment and dismissed the appeals. Admittedly, Shipping Corporation is a PSU. Hence, there are no illegality or perversity in the view taken by both the Authorities. This appeal must fail and it is accordingly dismissed.

Summary

Issues Involved:
The issue involved in this case is whether the unjust enrichment principle is applicable to Public Sector Undertakings (PSUs) in the context of excess paid duties arising from the finalization of provisional assessment under the Customs Act 1962.

Judgment Details:

*Issue 1: Application of Unjust Enrichment Principle to PSUs*

The appellant, Revenue, challenged the excess payment refund claimed by the respondent, a PSU, on the grounds of unjust enrichment. The original authority and the Commissioner (Appeals) both examined the claim and held that the duty incidence had not been passed on to any other person. The CESTAT dismissed the appeal, stating that the Doctrine of unjust enrichment is not applicable to PSUs, citing the authority in Mafatlal Industries Ltd. v. Union of India. The court agreed with the CESTAT's decision, noting that no material was presented to show a reversal or modification of the principle established in Mafatlal Industries. As the Shipping Corporation is a PSU, the court found no illegality or perversity in the decision of the authorities.

*Result:*
The appeal by the Revenue is dismissed as the Doctrine of unjust enrichment was held inapplicable to PSUs in this case, in line with the authorities cited and the nature of the claimant being a PSU.