2023 (8) TMI 270 - HC - Customs

Rebate claim - rejection on the ground of unjust enrichment - duty of excise paid by the manufacturer has been passed on to the merchant exporter or not - HELD THAT - In the instant case the respondent had exported goods through merchant exporter M/s. Syngenta India Limited. However without any material on record and despite this clear observation the department introduced the concept of unjust enrichment to reject the rebate claims of the petitioner. Even the Tribunal invoking Sec. 35(B) of the Act unnecessarily relegated the petitioner to the revisional authority when the only principal question that was decided and as a matter of principle within the parameters of Rule 18 the Appellate Authority had also accepted that in claims of rebate the concept of unjust enrichment was foreign. There was therefore no reason why the rebate claims of the petitioner should not have been processed in accordance with the rule position and such claims be granted. The respondents are directed to uphold the rebate claims sanctioned by the Assistant Commissioner Central Excise Customs Service Tax Division-II Ahmedabad vide its order dated 21.06.2017 - Petition allowed.

Summary

Issues:
The issues involved in the judgment are the rejection of rebate claims by the Appellate Authority and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) based on the concept of unjust enrichment in the case of export of goods.

Rejection of Rebate Claims by Authorities:
The petitioner, a manufacturer/exporter of pesticides, filed rebate claims seeking rebate of duty paid on goods exported through a merchant exporter. The Assistant Commissioner of Central Excise and Customs sanctioned the rebate claims totaling to Rs. 89,17,313 under Rule 18 of the Central Excise Rules, 2002. However, the Commissioner of Central Excise reversed the order, citing unjust enrichment as the duty paid had been passed on to the merchant exporter. The Tribunal upheld this decision, stating that the petitioner should approach the revisional authority. The petitioner contended that unjust enrichment does not apply in export cases and that the duty was paid on goods exported, not sold to the merchant exporter.

Legal Arguments and Analysis:
The petitioner's counsel argued that the duty was paid on goods exported, and rebate claims were made after obtaining a Disclaimer Certificate from the merchant exporter. The counsel emphasized that the concept of unjust enrichment does not apply in cases of rebate claims for exported goods. The respondent's counsel, however, argued that the duty paid was passed on to the merchant exporter, leading to unjust enrichment. The Tribunal suggested that the only remedy for rejected rebate applications was to approach the Central Government for revision.

Judicial Decision:
The Court noted that the authorities had accepted that unjust enrichment does not apply in rebate/refund cases involving the export of goods. Despite this, the authorities rejected the rebate claims based on unjust enrichment. The Court found no reason for the rejection and directed the respondents to uphold the rebate claims sanctioned by the Assistant Commissioner, ordering the processing and payment of the amounts within eight weeks.

This judgment highlights the importance of correctly applying legal principles in rebate claims for exported goods and clarifies that unjust enrichment should not be a ground for rejection in such cases.