2013 (11) TMI 998 - AT - Customs

Rejection of refund claim - unjust enrichment - Claim rejected after finalization of provisional assessment for the period prior to 13.07.2006 when Section 18 of Customs Act, 1962 was amended to make the provisions of Section 27 of Customs Act, 1962 applicable to the provisional assessment also - Held that - reference to provisions of Section 27 of the Act which generally deals with claim for refund of duty cannot be of any assistance to the revenue. Similarly the definition of the term assessment under Section 2(2) of the Act also cannot help the revenue in light of the specific provisions of Section 18 of the Act which override all other provisions of the Act. The contention that the Court should not permit a person to derive unjust benefit also does not merit acceptance. The Court can only read the provisions and the statute as they stand, and if necessary, interpret the same but the Court cannot legislate - on interpretation of provisions of Section 18 of the Act, on finalisation of assessment if any excess duty is found to have been paid at the time of provisional assessment Revenue is bound in law to make the refund without any claim being required to be made by an assessee. This would be the position in law upto 12-7-2006 and not thereafter. - Decided in favour of assessee.

Summary

Issues:
Rejection of refund claim after finalizing provisional assessment for the period prior to 13.07.2006 when Section 18 of Customs Act, 1962 was amended.

Analysis:
The appeal involved the rejection of a refund claim after finalizing the provisional assessment for a period before 13.07.2006, when Section 18 of the Customs Act, 1962 was amended to make the provisions of Section 27 applicable to provisional assessment. The appellant argued that several judgments had favored the non-applicability of unjust enrichment to refund claims arising from finalization of provisional assessments before 13.07.2006. The Revenue contended that unjust enrichment applied even to refund claims from assessments before the mentioned date.

The court examined the case records and referred to various judgments, notably the decision of the Hon'ble Gujarat High Court in a specific case. The court highlighted the distinction between Section 18 before and after the amendment, emphasizing that the amendment was substantive and not clarificatory. It was noted that prior to 13.07.2006, Section 18 did not allow the application of unjust enrichment to duty paid in excess during finalization of provisional assessments. The court emphasized that the provisions of Section 18 overrode other sections and that the principles of unjust enrichment under Section 27 could not be applied to Section 18 without considering the amendment from 13.07.2006. Consequently, the appeal was dismissed, and the refund claim of the appellant for the period before 13.07.2006 could not be rejected based on the doctrine of unjust enrichment.

Therefore, the judgment clarified that the principles of unjust enrichment could not be applied to refund claims arising from finalization of provisional assessments before 13.07.2006, as per the specific provisions of Section 18 of the Customs Act, 1962. The court's decision was based on the distinction between the pre-amendment and post-amendment versions of Section 18, emphasizing that the amendment was substantive and not retrospective in nature. The judgment highlighted the legislative intent behind the amendment and the necessity for a clear interpretation of the law without conflating the making and claiming of refunds.