2017 (10) TMI 986 - AT - Customs

Refund of duty paid - Section 26A of the Customs Act, 1962 - misdeclaration of goods - import of hazardous waste in the guise of Light Melting Scrap (LMS) - Held that - the impugned goods were not cleared by the Customs for home consumption whereas the provisions of Section 26A would apply only in cases where the goods have been cleared for home consumption and later, such goods are identified to the satisfaction of the Deputy Commissioner/ Additional Commissioner as imported goods are exported as specified in Clause (a) to (c) of Section 26A - the application of the appellant for refund is within the limitation period and since the goods were not cleared for home consumption, the Doctrine of Unjust Enrichment is not attracted - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection under Section 26A of the Customs Act, 1962 for mis-declared hazardous waste import; Applicability of Section 26A in case of goods not cleared for home consumption; Justification for refund claim; Doctrine of Unjust Enrichment; Claim for interest on delayed refund.

Analysis:
The appeal challenged the rejection of the refund claim under Section 26A of the Customs Act, 1962 due to mis-declared import of hazardous waste. The appellant contended that the impugned order was contrary to the law and judicial precedents. The appellant had entered a High Sea Sale Agreement for the purchase of light melting scrap, but the imported goods were found to contain prohibited materials. The goods were confiscated, re-exported, and fines were imposed. The Assistant Commissioner rejected the refund claim citing an offence under the Customs Act, making it not maintainable under Section 26A. The appellant argued that the goods were not cleared for home consumption, thus Section 26A did not apply. The appellant also claimed innocence, citing supplier fault, and sought refund under Section 27. Legal precedents were cited to support the appellant's position.

The Tribunal found the impugned order unsustainable as it solely relied on Section 26A, which was deemed inapplicable since the goods were not cleared for home consumption. The appellant had already paid fines, and the cited legal precedents supported the appellant's innocence due to supplier fault. The Tribunal held that the appellant was entitled to the refund. The appellant's refund application was within the limitation period, and the Doctrine of Unjust Enrichment did not apply as the goods were not cleared for home consumption. The Tribunal allowed the appeal, granting interest on the delayed refund as per the Supreme Court's ruling in a relevant case. The impugned order was set aside, and the appellant was granted the refund with interest.

In conclusion, the Tribunal ruled in favor of the appellant, overturning the rejection of the refund claim under Section 26A. The judgment highlighted the inapplicability of Section 26A due to the goods not being cleared for home consumption, the appellant's innocence in the matter, and the entitlement to refund and interest within the legal framework.