2024 (10) TMI 230 - AT - Customs

Seeking refund of amount of countervailing duty (CVD) while importing goods declaring those goods as Natural gum in raw form vide Bills of Entry filed during the year 2011 to 2014 - time limitation - unjust enrichment. Whether in terms of CBEC clarification dated 28.06.2007 the appellant is entitled for exemption from payment of CVD while importing Natural gum in raw form and is thus, eligible for refund of the amount already paid by appellant? - HELD THAT - Vide this clarification the CBEC has exempted only Imported Gum Arabic from levy of CVD The Bills of Entry in question have declared the imported goods as Natural Gums . (Natural Gum siftings/ Natural Gum rejected/ Natural Gum No. 3 rejected) thus goods have not been declared as Gum Arabic to which the exemption from leviability of CVD is available vide clarification dt. 28.06.2002. No evidence has been produced to show that imported good was Natural Gum Arabic . These observations are sufficient for us to hold with appellant has failed to establish its eligibility of claiming the benefit of exemption from payment of CVD in terms of CBEC clarification dated 28.06.2007. Thus, the CVD self-assessed has rightly been paid. No situation arise for refund of same - issue stands decided against the appellant. Whether the refund claim is rightly rejected on the ground of limitations and that of unjust enrichment ? - HELD THAT - In the present case apparently and admittedly the appellant has not modified the self-assessment vis-a-vis the impugned amount of CVD. Also, the claim is not covered under proviso to section 27 of the customs Act, 1962. Thus the appellant is not entitled to claim the refund without such modification and the claim is otherwise barred by limitation - The doctrine of unjust enrichment is that no person can be allowed to enrich equitably at the expense of another. Thus if the assessee has passed the burden of duty paid to the consumer the assessee is not allowed to enrich at the expense of said consumer. The duty was paid at the time of clearance of the imported goods to the domestic market. There is no evidence found on record to show that the quantum of self-assessed duty was not the part of the value at which the goods were sold. The present is the case of unjust enrichment Refund in such case cannot be allowed. The appellant is not eligible for the exemption from payment of CVD in terms of CBEC clarification dated 28.06.2007. The Refund claim is otherwise barred by time and by the principle of unjust enrichment and can t be sanctioned - there are no infirmity in the order under challenge - the order passed by Commissioner (Appeals)is hereby upheld - appeal dismissed.

Summary

Issues Involved:

1. Eligibility for exemption from payment of Countervailing Duty (CVD) under CBEC clarification dated 28.06.2007.
2. Timeliness of the refund claim under Section 27 of the Customs Act, 1962.
3. Applicability of the principle of "unjust enrichment."

Issue-wise Detailed Analysis:

1. Eligibility for Exemption from CVD:

The appellant sought a refund of CVD based on the CBEC clarification dated 28.06.2007, which exempts "Gum Arabic" from CVD. The appellant claimed the exemption for "Natural Gum in raw form," arguing it fell under the same category. However, the tribunal noted that "Natural Gum" is a generic term encompassing various types, such as Asafoetida, Benjamin ras, Karaya gum, and Gum Arabic, each with different market values. The exemption specifically applies only to "Gum Arabic" as per Notification No. 96/2008-Customs. The tribunal found no evidence that the imported goods were "Natural Gum Arabic." Therefore, the appellant failed to establish eligibility for the exemption, and the self-assessed CVD was deemed correctly paid.

2. Timeliness of the Refund Claim:

The refund claim was filed on 30.01.2019 for duties paid between 2011 and 2014, exceeding the one-year limitation period under Section 27 of the Customs Act, 1962. The appellant argued that the CVD was paid under protest, which would exempt them from the limitation period. However, the tribunal found that the protest was not contemporaneous with the payment but was raised later. According to the Supreme Court's rulings in Escorts Ltd. and Priya Blue Industries Ltd., self-assessment is an assessment order, and any challenge to it must be made through appeal or modification under Section 128 of the Customs Act. The tribunal concluded that the refund claim was time-barred as the self-assessment was not modified within the stipulated period.

3. Applicability of the Principle of "Unjust Enrichment":

The tribunal examined whether the refund would result in "unjust enrichment" to the appellant. The doctrine of "unjust enrichment" prevents a party from benefiting at another's expense without justification. The appellant did not demonstrate that the duty paid was not passed on to consumers or that it was not included in the sale price of the goods. The tribunal cited the Supreme Court's decision in Mafatlal Industries Ltd., which emphasized that refunds should not lead to unjust enrichment and that the right to a refund is not absolute. The tribunal found that the appellant did not provide evidence to counter the presumption of unjust enrichment, thereby justifying the rejection of the refund claim on this ground.

Conclusion:

The tribunal upheld the rejection of the refund claim, affirming that the appellant was not entitled to the exemption from CVD, the claim was time-barred, and it was subject to unjust enrichment. The order of the Commissioner (Appeals) was upheld, and the appeal was dismissed.