2005 (6) TMI 77 - AT - Customs

Summary

Issues:
- Interpretation of warehousing period under Customs Act, 1962
- Entitlement to refund of excess interest paid
- Unjust enrichment and documentary evidence requirement for refund claim

Interpretation of warehousing period under Customs Act, 1962:
The appellants warehoused imported capital goods before an amendment reduced the warehousing period from three years to one year. The High Court determined that the one-year period applied to them. The Supreme Court upheld this decision, ordering interest payment at 12% p.a. till the refund of excess amount. The appellants claimed a refund of Rs. 81,49,624.50, comprising excess interest and 12% interest on the excess amount. The Original Authority initially rejected the claim due to lack of evidence on unjust enrichment. The de novo adjudication sanctioned a refund of Rs. 59,89,260/-, including excess interest and interest @ 12% till 31-5-96. The appellants contended they were entitled to interest from 1-6-96 to 17-8-98.

Entitlement to refund of excess interest paid:
The appellants argued that they were entitled to the refund due to a huge loss on the sale of capital goods and the amount shown in the Balance Sheet as receivables from the department. They highlighted discrepancies in the Original Authority's decision to credit the refund to the Consumer Welfare Fund. The Adjudicating Authority only considered evidence of no unjust enrichment during de novo adjudication. The Tribunal found that the appellants had provided relevant documents even during the initial claim for refund. The Commissioner (Appeals) upheld the decision to restrict interest payment till 31-5-96, which the Tribunal deemed incorrect. The Tribunal allowed the appeal, granting interest from 1-6-96 to 17-8-98 in line with the Supreme Court decision.

Unjust enrichment and documentary evidence requirement for refund claim:
The Tribunal analyzed the evidence provided by the appellants, including Balance Sheet entries indicating amounts refundable to the department. They referenced previous Tribunal decisions supporting the appellants' position on unjust enrichment. Despite the Original Authority's claim of lack of evidence, the Tribunal found that the appellants had substantiated their claim for refund even during the initial proceedings. The Tribunal disagreed with the Commissioner (Appeals) and concluded that the appellants were entitled to interest beyond 31-5-96. The appeal was allowed with consequential relief, emphasizing the appellants' right to interest payment in accordance with the Supreme Court decision.