2023 (12) TMI 384 - AT - Customs

Refund claim - rejection on the basis of the judgment of the Hon ble Apex Court in the case of ITC Limited Vs Commissioner of Central Excise Kolkata IV 2019 (9) TMI 802 - SUPREME COURT holding that without challenge/modifying the assessment of Bills of Entry the refund is not entertainable - Certificate of Country of Origin not provided at the time of presenting the Bills of Entry - principles of unjust enrichment. Whether in the facts and circumstances of the case the decision of ITC Limited Vs Commissioner of Central Excise Kolkata IV is applicable or not? - HELD THAT - Admittedly in the case in hand the respondent was not having Certificate of Country of Origin at the time of filing of Bills of Entry and paid Customs duty. Accordingly the goods were cleared for home consumption but later on the respondent was able to produce the Certificate of Country of Origin in terms of Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules 2011 and filed refund claim in terms of Notification No.55/2011-Cus (NT) dated 01.08.2011 which provides that the respondent is entitled for preferential tariff treatment and is entitled to file refund claims within twelve months from the date of filing of Bills of Entry - In this case it is a fact that the respondent has filed the refund claim on production of Certificate of Country of Origin within twelve months of filing of Bills of Entry and claimed refund of excess duty paid in terms of Notification No.55/2011-Cus (NT) dated 01.08.2011. The decision of ITC Limited is not applicable to the present facts and circumstances of the case as at the time of filing of Bills of Entry the appellant was not entitled to claim the refund claim of excess duty paid by them. Later on when the respondent was able to get Certificate of Country of Origin they filed refund claim in terms of Notification No.55/2011-Cus (NT) dated 01.08.2011 which permits the respondent to file the refund claim within 12 months from the date of filing of the Bills of Entry. The rejection of refund claim initially by applying the decision of ITC case is not sustainable to the facts and circumstances of the case - the refund claims filed by the respondents are allowed. Whether the bar of unjust enrichment is applicable to the facts and circumstances or not? - HELD THAT - The respondent being a manufacturer and using the imported goods to manufacture the final product which is exported in that circumstances the question of bar of unjust enrichment does not arise - the respondent has passed the bar of unjust enrichment in the facts and circumstances of the case. The respondent is entitled for refund as prayed - the adjudicating authority is directed to do the needful in accordance with law within 60 days from the date of receipt of this order. The appeal filed by the Revenue is dismissed.

Summary

Issues Involved:
1. Applicability of the ITC Limited judgment.
2. Applicability of the bar of unjust enrichment.

Issue (a): Applicability of the ITC Limited Judgment

The Tribunal examined whether the decision of ITC Limited Vs. Commissioner of Central Excise, Kolkata IV reported in 2019 (360) ELT 216 (S.C.) was applicable to the present case. The respondent had filed 27 Bills of Entry for importing goods from Japan and paid customs duty at the time of assessment. Later, the respondent obtained the Certificate of Country of Origin retroactively and filed refund claims under Notification No.55/2011-Cus (NT) dated 01.08.2011. The Tribunal noted that the Notification allows for the issuance of the Certificate of Origin retroactively and permits filing refund claims within twelve months from the date of filing the Bills of Entry. Since the respondent was not entitled to claim the refund at the time of filing the Bills of Entry but did so upon obtaining the Certificate of Origin, the Tribunal held that the ITC Limited judgment was not applicable. Therefore, the rejection of the refund claim based on the ITC case was deemed unsustainable. The refund claims filed by the respondents were allowed.

Issue (b): Applicability of the Bar of Unjust Enrichment

The Tribunal also addressed whether the bar of unjust enrichment was applicable. The adjudicating authority initially found that the respondent, being a manufacturer who uses the imported goods to produce Graphite Electrodes for export, had not passed on the incidence of duty to any other person. This finding was not challenged by the Revenue and thus attained finality. The Tribunal further noted that since the respondent uses the imported goods in manufacturing and exports the final product, the question of unjust enrichment does not arise. The Tribunal held that the respondent had passed the bar of unjust enrichment and was entitled to the refund as prayed. The adjudicating authority was directed to process the refund within 60 days.

Conclusion

The appeal filed by the Revenue was dismissed, and the Cross Objection filed by the respondent was allowed with consequential relief.