2024 (5) TMI 902 - AT - Customs

Refund claim - unjust enrichment - Initially claim filed without challenging the self-assessed Bills of Entry - Whether appellant has passed on the burden of differential duty to its buyers or not - HELD THAT - During pendency of the present appeal, the Appellant assessee had sought amendment of the same 136 self-assessed Bills of Entry, against which refund was rejected. Appellant contends that this amendment was sought pursuant to the judgment of the Hon ble Supreme Court in ITC Ltd., Vs Commissioner of Central Excise 2015 (4) TMI 561 - SUPREME COURT wherein it was held that refund u/s 27 of the Customs Act would only be permissible when the Bills of Entry has been amended or modified under the provisions of the Customs Act; and so appellant submitted letter dated 22.11.2019 before the Customs Department requesting to amend the 136 Bills of Entry u/s 149 of the Customs Act, to reassess the Bills of Entry and for grant subsequent refund. This request of the appellant was rejected against which appellant moved before Hon ble High Court of Telangana. The Hon ble Telangana High Court by its judgment dated 12.08.2021 in Writ Petition in 2021 (8) TMI 622 - TELANGANA HIGH COURT have been pleased to allow the Writ Petition to the effect that the Appellant is entitled to amendment of their Bill of Entries and consequential benefits u/s 149 of the Act. The Hon ble High Court observed that the appellant cannot be penalized for what the authority out to have done correctly by himself. The Hon ble High Court also observed that appellant was entitled to avail the benefit of the reduced rate of 1% under the relevant Notification but EDI system used for filing the Bills of Entry was not updated to make available the benefit of lower rate of CVD 1% and was forced to pay CVD @ 6% Pursuant to Order of Hon ble High Court, Adjudicating Authority vide Order-in-Original No. 2/2023-ACC(R) dated 25.01.2023 have granted the consequential refund of excess duty paid by the appellant and gave following finding to hold that there is no unjust enrichment. Thus, as Original Adjudicating Authority has subsequently held that there is no unjust enrichment, the dispute in this appeal no longer survives. Accordingly, this appeal is disposed as infructuous.

Summary

Issues:
1. Rejection of refund claim on the ground of unjust enrichment.
2. Eligibility for concessional rate of duty.
3. Amendment of self-assessed Bills of Entry.
4. Compliance with conditions of notification for refund.
5. Burden of proof on unjust enrichment.
6. Limitation of time under Section 27 of the Customs Act.
7. High Court judgment allowing amendment of Bills of Entry.
8. Grant of refund by Adjudicating Authority.
9. Disposal of appeal as infructuous.

Analysis:
The Appellant appealed against the rejection of its refund claim due to unjust enrichment after importing mobile phones under specific tariff headings. The claim was based on a Supreme Court decision regarding concessional duty rates. The original authority rejected the claim citing non-compliance with conditions of the notification and failure to challenge the assessment earlier. The burden of proof for unjust enrichment was not met, and the claim was also hit by the limitation of time under the Customs Act.

During the appeal process, the Appellant sought to amend the Bills of Entry based on a Supreme Court judgment allowing refunds only after such amendments. The High Court allowed the amendment, noting the Appellant's entitlement to the reduced duty rate due to system errors. The High Court directed the Adjudicating Authority to amend the Bills of Entry and consider the refund application in line with relevant legal principles.

Following the High Court's order, the Adjudicating Authority granted the refund, finding no unjust enrichment based on previous refund orders for similar matters. As there was no unjust enrichment, the appeal was disposed of as infructuous. The Adjudicating Authority's decision rendered the dispute moot, leading to the appeal's dismissal.

In conclusion, the issues surrounding the rejection of the refund claim due to unjust enrichment were resolved after the Adjudicating Authority granted the refund, finding no evidence of passing on the duty burden. The High Court's judgment allowing the amendment of Bills of Entry played a crucial role in resolving the matter, ultimately leading to the disposal of the appeal.