2014 (2) TMI 973 - AT - Customs

Denial of refund claim - finalization of provisions assessments - djudicating authority sanctioned the refund claim filed by the appellant but credited the same to the consumer welfare fund - Unjust enrichment - Held that - On the issue of applicability of the principles of unjust enrichment an amendment has been made under Section 18 of the Customs Act, 1962 with effect from 13.07.2006, linking the refunds arising out of finalization of provisions assessments to the provisions contained in Section 27 of the Customs Act, 1962. As the period involved in the present refund claim is 07.09.2007 when amendment carried out in Section 18 w.e.f. 13.07.2006, linking provisions of Section 18 and 27 of Customs Act, 1962, was existing, therefore, doctrine of unjust enrichment will be applicable to the appellants refund claim pertain to the period after 13.07.2006. Both the original adjudicating authority and the first appellate authority has giving a finding that appellant has not submitted documents like Charter - Party Agreement, Balance Sheet or Audited Financial documents to support the CA certificate to the effect that unjust enrichment is not attracted. In order to meet the ends of justice it is required that an opportunity should be given to the appellant to substantiate their claim that duty refund sought for has not been recovered by furnishing necessary documentary evidences. The matter is remanded to the adjudicating authority a fresh devono proceedings, with directions to the appellant to furnish all the documentary evidences to establish that excess duty paid has not been recovered - Decided in favour of assessee.

Summary

Issues:
1. Applicability of the doctrine of unjust enrichment to a refund claim.
2. Requirement of documentary evidence to support the claim of unjust enrichment.
3. Remand of the case for fresh proceedings.

Analysis:

1. Applicability of the doctrine of unjust enrichment:
The appellant filed an appeal against the order upholding the refund claim but crediting it to the consumer welfare fund due to unjust enrichment. The appellant argued, citing previous judgments, that unjust enrichment does not apply to refunds arising from unjust enrichment. However, the Revenue contended that the doctrine applies to refunds from finalization of provisional assessments. The Tribunal noted the amendment under Section 18 of the Customs Act, linking refunds to Section 27, making unjust enrichment applicable post the amendment date. The Tribunal upheld the applicability of unjust enrichment to the appellant's refund claim post the amendment date.

2. Requirement of documentary evidence:
Both the original and appellate authorities found the appellant lacking in submitting necessary documents to support the claim that unjust enrichment did not occur. The Tribunal emphasized the need for documentary evidence like Charter-Party Agreement, Balance Sheet, or Audited Financial documents to substantiate the claim of no unjust enrichment. The Tribunal directed the appellant to provide all necessary documentary evidence to establish that the excess duty paid was not recovered. The adjudicating authority was instructed to grant a personal hearing to the appellant before making a decision in fresh proceedings.

3. Remand of the case:
In light of the lack of documentary evidence and the need for a fair opportunity to substantiate the claim, the Tribunal allowed the appeal by remanding the case for fresh proceedings. The appellant was given the chance to present all required documentary evidence to support their claim, and the adjudicating authority was directed to conduct denovo proceedings and grant a personal hearing to the appellant before making a decision.

In conclusion, the Tribunal's judgment focused on the applicability of unjust enrichment to the appellant's refund claim post an amendment to the Customs Act, the necessity of documentary evidence to support the claim of no unjust enrichment, and the remand of the case for fresh proceedings to ensure a fair opportunity for the appellant to establish their case.