2017 (9) TMI 1449 - AT - Customs

Refund claim - whether refund is admissible, when, the respondent did not challenge the assessment? - Held that - the issue is squarely covered in favor of the respondent by the decision of the Hon ble Delhi High Court in the case of Aman Medical Products Ltd. v. CC, Delhi 2009 (9) TMI 41 - DELHI HIGH COURT , where it was held that non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under Section 27 of the Customs Act, 1962 - refund allowed. Unjust enrichment - Held that - the facts are not clear as to how the imported goods were dealt with, whether the inputs were actually used to manufacture final products. The Commissioner(Appeals) has passed a perfunctionary order without discussing the complete facts in the background of the judicial precedents in the matter - the matter of unjust enrichment needs to be remanded. Appeal allowed in part and part matter on remand.

Summary

Issues:
Refund claim without challenging assessment, admissibility of refund claim, doctrine of unjust enrichment.

Analysis:
1. Refund Claim without Challenging Assessment:
The case involved a refund claim by the respondent for duty paid on imported goods due to a mistake in not incorporating a relevant notification in the check list. The department argued that since the assessment was not challenged, the refund claim was not maintainable. However, the lower appellate authority allowed the appeal, citing precedents like Goa Shipyard Ltd. and Whirpool of India cases. The Revenue appealed the decision.

2. Admissibility of Refund Claim:
The Adjudicating Authority relied on the Supreme Court's decision in Flock India Ltd. case, stating that a refund is not payable if the assessment was not challenged. However, the Commissioner(Appeals) referred to the Karnataka Power Corporation Ltd. case, allowing consideration of refund claims even without filing an appeal against the assessment. The issue of whether the refund claim is admissible was discussed in light of the doctrine of unjust enrichment.

3. Doctrine of Unjust Enrichment:
The Tribunal found that the first issue was in favor of the respondent based on the Delhi High Court's decision in Aman Medical Products Ltd. case. The Tribunal also referred to the Hindustan Petroleum Corpn.Ltd. case where the importer was favored on a similar issue. The Tribunal directed the Commissioner(Appeals) to examine the issue of unjust enrichment thoroughly, considering the facts and legal precedents.

In conclusion, the Tribunal held that the respondent was eligible for a refund on the first issue and remanded the issue of unjust enrichment to the Commissioner(Appeals) for further examination. The Commissioner(Appeals) was instructed to provide a decision within four months of receiving the Tribunal's order, ensuring a fair opportunity for the respondent.