2017 (5) TMI 26 - AT - Customs

Refund claim - unjust enrichment - price escalation clause - denial on the ground that the finalization of assessment was not challenged by the claimant as prescribed in Board Circular No.24/2004-Cus. Dated 18.3.2004 - whether the bar of unjust enrichment is applicable to this case or not? - Held that - the bar of unjust enrichment is not applicable because the provisional assessment was completed before 14.7.2006 and moreover, the assessee is a public sector undertaking - the assessee has also produced the certificate of Chartered Accountant (CA) specifically certifying that incidence of duty has not been passed on to the buyer - appeal dismissed - decided against Revenue.

Summary

Issues:
- Application of the bar of unjust enrichment in a case involving provisional assessment of customs duty.
- Whether the appellant, a public sector undertaking, is exempt from the bar of unjust enrichment.
- Consideration of Chartered Accountant certificate as evidence of duty not being passed on to the buyer.
- Interpretation of relevant judgments by the Hon’ble High Court and Supreme Court regarding unjust enrichment.

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore involved a dispute where the department challenged an order setting aside the Order-in-Original and allowing the appeal of the assessee concerning a refund claim for excess duty paid during the import of cumene. The issue revolved around the application of the bar of unjust enrichment. The department contended that the claimant did not challenge the assessment order, hence not entitled to a refund. However, the Commissioner of Customs (Appeals) allowed the appeal, stating that the claimant had the right to file a refund claim. The department appealed to CESTAT, which dismissed the appeal due to lack of COD clearance, leading the importer to file a refund claim. The Assistant Commissioner sanctioned the refund but credited it to the Consumer Welfare Fund. Subsequently, the Commissioner of Customs (Appeals) set aside the Order-in-Original, allowing the appeal of the assessee based on the exemption of public sector undertakings from the bar of unjust enrichment.

The Tribunal analyzed the case to determine whether the bar of unjust enrichment was applicable. It noted that the Commissioner (A) had considered all contentions and concluded that the bar was not applicable due to the completion of provisional assessment before a specified date. Additionally, the Commissioner relied on the judgment of the Hon’ble High Court regarding public sector undertakings not falling under the bar of unjust enrichment. The Tribunal emphasized the importance of the Chartered Accountant certificate submitted by the appellant, certifying that the duty incidence was not passed on to the buyer. Referring to the Supreme Court's precedent, the Tribunal highlighted the burden on the claimant to prove non-passing of the burden, which, in this case, was supported by the CA certificate. The Tribunal found the Commissioner's order well-reasoned, considering relevant judgments, and dismissed the Revenue's appeal, upholding the decision in favor of the appellant.

In conclusion, the Tribunal's decision rested on the exemption of public sector undertakings from the bar of unjust enrichment, supported by the CA certificate and interpretations of relevant judgments. The judgment emphasized the importance of proving non-passing of duty burden and upheld the Commissioner's decision, dismissing the Revenue's appeal.