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Issues involved: Appeal against rejection of refund claim u/s 18 of the Customs Act due to provisional assessment and unjust enrichment.
Summary: The appeal was filed against the rejection of a refund claim amounting to Rs. 1,01,06,333/- by the Commissioner of Customs (Appeals), New Delhi. The dispute arose from the provisional assessment of 156 bills of entry for imported components used in manufacturing 'Front Wheel Drive Axle Assembly' for Maruti cars. The Special Valuation Branch directed to accept the invoice value, leading to the excess amount paid by the assessee. The appellant sought a refund, which was denied on grounds of unjust enrichment. The Tribunal referred to Section 18 of the Customs Act, specifically clause 2(a), which allows for adjustment of excess duty paid against the duty finally assessed, entitling the importer to a refund. The Supreme Court's ruling in Mafatlal Industries Ltd. v. Union of India clarified the procedure for refund in cases of provisional assessments being made final, emphasizing that the principles of unjust enrichment do not apply in such situations. The appellant argued that the amount paid as a deposit during provisional assessment should be returned since the loading of 5% on the invoice value was later deemed unnecessary by the Special Valuation Branch. However, the Tribunal held that this argument was unnecessary as the case was already covered by the Supreme Court's decision in Mafatlal Industries Ltd. Ultimately, the Tribunal allowed the appeal, set aside the previous orders, and directed the refund of Rs. 1,01,06,333/- to the appellant.
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