2017 (2) TMI 236 - AT - Customs

Unjust enrichment - refund of excess duty paid - finalization of provisional assessment - denial on the ground that appellant could not establish that the incidents of excess paid Customs duty was not passed on to the customers - Held that - as far as Section 18 of the Customs Act is concerned when an amount becomes refundable after a final order is passed, the same has to be refunded immediately and for such purpose, the assessee is not required to move an application under Section 27 of the Customs Act, 1962 since the same is not applicable in such cases - for the period before 13.07.2006, provisions of Sub-Sections 3, 4 & 5 of said Section 18 shall not be applicable. The provisions of unjust enrichment not applicable in the present case - appeal allowed - decided in favor of assessee.

Summary

Issues:
- Admissibility of refund under Section 27 of the Customs Act, 1962
- Applicability of the bar on unjust enrichment
- Interpretation of Section 18 of the Customs Act, 1962

Admissibility of Refund under Section 27 of the Customs Act, 1962:
The case involved five appeals related to the same appellant regarding the admissibility of refund claimed under Section 27 of the Customs Act, 1962. The appellants, importers of Petroleum Crude Oil, had cleared the oil for home consumption after warehousing and provisional assessment. The Original Authority rejected the refund claims, citing unjust enrichment as the excess duty paid was not proven to be non-passed on to customers. The Ld. Commissioner (Appeals) upheld the rejection, leading to the appeals before the Tribunal.

Applicability of the Bar on Unjust Enrichment:
The ground of appeal raised was that the bar on unjust enrichment should not apply when prices are fixed by the government and not based on the cost of goods manufacture. The appellants argued that the provisions of Section 18 of the Customs Act, 1962, specifically Clause (a) of Sub-Section (2), allowed for a refund of excess duty paid upon finalization of assessment. They contended that the provisions inserted in Sub-Sections 3, 4, and 5 of Section 18 after 13.07.2006 were not applicable to their case, which dated back to 1998-2004. They relied on a ruling by the Hon'ble High Court of Delhi in a similar case involving the Commissioner of Customs Vs. Indian Oil Corporation.

Interpretation of Section 18 of the Customs Act, 1962:
After hearing both parties, the Tribunal found merit in the arguments presented by the appellants. They noted the ruling by the Hon'ble High Court of Delhi, which stated that when an amount becomes refundable after a final order, immediate refund is required without the need for a separate application under Section 27 of the Customs Act, 1962. The Tribunal held that the provisions of unjust enrichment were not applicable in the present appeals based on the interpretation of Section 18 and the High Court ruling. Consequently, the Tribunal allowed all five appeals, granting the appellants consequential relief as per the law.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT ALLAHABAD highlights the issues, arguments, and the final decision rendered by the Tribunal regarding the admissibility of the refund, the bar on unjust enrichment, and the interpretation of relevant provisions of the Customs Act, 1962.