2024 (10) TMI 838 - AT - Customs

Refund claim of duty paid on short landing of goods - mischief of unjust enrichment - date of calculation of interest on refund claim. Unjust Enrichment in respect of the refund of duty paid on short landing of imported goods - HELD THAT - There is no dispute that the appellant have shown the refund amount as receivable in their books of accounts and a Chartered Accountant s certificate was issued to this effect. Therefore, firstly the duty paid in respect of goods which have not arrived in India therefore, question of passing ofthe incidence of duty does not arise. Secondly, the amount of duty so paid on the short landing of the goods was shown as receivable in the books of accounts which has been certified by a Chartered Accountant. On this issue, the Tribunal in the decision in the appellant s own case reported at M/S PETRONET LNG LTD. VERSUS CC AHMEDABAD 2011 (9) TMI 515 - CESTAT, AHMEDABAD already considered the issue of Unjust Enrichment and held that in thisfact Unjust Enrichment is not applicable. In view of the fact that the amount of refund has been shown as receivable which is supported by Chartered Accountant s certificate there is absolutely no doubt that the incidence of duty paid on short landing of goods has not been passed on to any other person. Therefore, there is no case of Unjust Enrichment against the assessee. Accordingly, the impugned order passed by the Learned Commissioner (Appeals) is absolutely legal and in order which does not require any interference and hence, the same is upheld, revenue s appeal is dismissed. From which date the interest on refund is applicable? - HELD THAT - From the judgment in MANISHA PHARMO PLAST PVT. LTD. VERSUS UNION OF INDIA 2020 (11) TMI 726 - SUPREME COURT , it can be seen that Landmark judgment of the Hon ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT was followed and held that the interest on refund is payable from 3 months of date of filing refund application. Therefore, the appellant are entitled for the interest on refund from the date after 3 months of filing a refund application. The impugned orders are set aside - Appeal allowed.

Summary

Issues:
1. Unjust enrichment in the refund claim of duty paid on short landing of goods.
2. Entitlement to interest on refund from the date of filing or from the date of Commissioner (Appeals) order.

Analysis:
1. The first issue pertains to the question of unjust enrichment in the refund claim of duty paid on short landing of goods. The Revenue contended that the refund was credited to the Consumer Welfare Fund due to the appellant's failure to prove non-passing of duty incidence. However, the Commissioner (Appeals) allowed the appeal, citing a previous Tribunal order where unjust enrichment was deemed inapplicable. The Tribunal noted that the appellant had shown the refund as receivable in their accounts, supported by a Chartered Accountant's certificate. The Assistant Commissioner, after rejecting the Revenue's Stay Application, concluded that there was no unjust enrichment. Consequently, the Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal.

2. The second issue concerns the entitlement to interest on the refund amount. The Revenue argued that interest should accrue only from the date of the Commissioner (Appeals) order, citing a High Court judgment. However, the appellant relied on a Supreme Court decision that ruled interest should be payable from 3 months after the refund application filing date. The Tribunal, following the Supreme Court precedent, held that the appellant was entitled to interest from 3 months after the refund application filing date. As a result, the Tribunal set aside the previous orders and allowed the appellant's appeals.

In conclusion, the Tribunal dismissed the Revenue's appeal on unjust enrichment and allowed the appellant's appeals on the interest claim, aligning with the Supreme Court's interpretation. The judgment clarified the application of unjust enrichment and the timeline for interest accrual on refund claims, providing a comprehensive analysis of the legal principles involved in the case.