2023 (11) TMI 318 - AT - Customs

Invocation of principles of unjust enrichment - Valid sanction of refund or not - conversion of foreign going vessel to coastal run - subsequent on finalization, whatever un-utilised consumables were there, the excess amount of duty paid was refundable or otherwise - HELD THAT - The admitted facts are that the Appellants were agents for liners, who filed refund claim under authorization given to them in respect of excess customs duty paid on bunkers and other stores in connection with conversion and reversion of vessel, as per the procedure provided in Circular No. 58/97 dated 06.11.1997 - The CBEC has prescribed a procedure for collection of duty on ship s stores and bunker consumed during coastal run vide Circular No. 58/97 dated 06.11.1997. This special procedure, inter alia, provides that the duty on the bunkers like diesel, furnace oil, etc., may be recovered at 110% of duty leviable on the quantity estimated to be consumed during the coastal run at the time of conversion from foreign run to coastal run on provisional assessment basis. Admittedly, the respondent agent is following the procedure prescribed for the steamer agents in terms of Board Circular dated 06.11.1997 and Board s letter dated 24.11.2005. It is essentially meant for recovery of applicable customs duty on the quantity actually consumed during the coastal run and based on the actual consumption, the duty could turn out to be either short or excess than quantity on which duty was paid, based on estimated quantity. The matter is no longer res integra. In the case of COMMISSIONER OF CUSTOMS, PUNE VERSUS M/S ATLANTIC SHIPPING PVT LTD 2014 (12) TMI 109 - CESTAT MUMBAI dismissed the Appeal of Revenue. There is no error in the impugned Order-in- Appeal, upholding the original order - appeal of Revenue dismissed.

Summary

Issues:
The dispute revolves around the refund claim filed by the appellant after converting a foreign going vessel to coastal run and paying duty for consumables. The main issue is whether the excess duty paid on finalization of assessment, in this case, is refundable or not.

Adjudicating Authority's Findings:
The Adjudicating Authority found that the refund claim was filed within the stipulated time limit and that the duty incidence was not passed on to any other person by the claimant. The excess duty paid on finalization of the assessment was deemed refundable, as the consumables were still on board the vessel and the duty incidence on these consumables did not pass to others.

Commissioner (Appeals) Decision:
The Commissioner (Appeals) dismissed the appeal by Revenue, stating that the refund was properly granted following the directions of the Board provided in Circular No. 58/97-Cus dated 06.11.1997. It was held that the issue of refund in the case of conversion of a foreign going vessel to coastal run was covered by the Circular and there was no merit in the grounds of Revenue.

Tribunal's Decision:
The Tribunal heard the arguments of the Revenue and perused the records. It was noted that the refund was allowed based on the special procedure for determining duty liability on consumables during a coastal run of a foreign going vessel. The Tribunal found that the principles of unjust enrichment were not applicable in this case, as the consumables remained on board at the time of conversion into an ocean-going vessel.

Conclusion:
The Tribunal upheld the decision of the Adjudicating Authority and the Commissioner (Appeals), stating that there was no error in the impugned Order-in-Appeal. The appeal by Revenue was dismissed, and the refund was deemed valid based on the prescribed procedure for determining duty liability on consumables during a vessel's coastal run.