2013 (3) TMI 324 - AT - Customs

Bill of Entry was provisionally assessed - Benefit of exemption under the Notification No. 36/96-Cus., dated 27-3-1996 - Cash refund - Unjust enrichment - Held that - The assessee was eligible for the exemption excess amount paid by the assessee consequent to finalization of provisional assessment was required to be suo motu refunded without the claim being submitted by the assessee and, therefore, did not attract the provision of unjust enrichment. In the case of Hindustan Zinc Ltd. (2009 (2) TMI 100 - CESTAT AHMEDABAD) also, it has been held by the Larger Bench of the Tribunal that refund claim for the period prior to 13-7-2006 which became due on final assessment is to be made without the claim being submitted by the assessee and that the provisions of unjust enrichment are not applicable. Finally the appeal by the department is rejected

Summary

Issues:
- Whether the refund arising from provisional assessment is subject to the provisions of unjust enrichment?
- Whether the refund claim for the period prior to certain dates is required to be made by the assessee or is to be made suo motu?
- Whether the principles of unjust enrichment apply to refund arising out of provisional assessment prior to a specific date?

Analysis:

Issue 1:
The case involves a dispute over the refund arising from provisional assessment and whether it is subject to the provisions of unjust enrichment. The Tribunal had previously decided in favor of the assessee, holding them eligible for an exemption under a specific notification. The original authority sanctioned the refund but directed it to be credited to the Consumer Welfare Fund due to concerns about unjust enrichment. On appeal, the Commissioner (Appeals) set aside this decision and allowed the cash refund. The department argued that the provisions of unjust enrichment should apply, as the finalization occurred in 2000 but the refund was ordered in 2008 after a Tribunal decision.

Issue 2:
The second issue pertains to whether the refund claim for the period before certain dates needs to be made by the assessee or is to be made suo motu. The Tribunal noted amendments to the Customs Act, specifying that refunds arising out of provisional assessments were required to be claimed within a year from finalization after certain dates. However, prior to specific dates, the Tribunal held that refunds due on final assessment were to be made without a claim from the assessee and were not subject to unjust enrichment provisions.

Issue 3:
The final issue revolves around whether the principles of unjust enrichment apply to refunds arising from provisional assessments before a particular date. The Tribunal considered the case history and relevant legal precedents, including decisions by the Larger Bench and the High Court of Gujarat. It was established that for refund claims prior to certain dates, the provisions of unjust enrichment were not applicable, and refunds were to be made without the need for a claim from the assessee.

In conclusion, the Tribunal found no merit in the department's appeal and upheld the Commissioner (Appeals)'s decision to allow the cash refund to the assessee. The judgment highlighted the application of unjust enrichment provisions based on the timing of the finalization of provisional assessments and the relevant legal amendments.