2019 (12) TMI 569 - AT - Customs

Refund of Cess paid - cess was paid under protest - refund rejected on the ground of that assessment order not challenged and also on the ground of unjust enrichment - HELD THAT - The Bills of Entry were assessed at zero rate of duty and the amount was debited in Bond. The issue involved is only of rubber cess. As per Appellant if there is no duty charged on Bill of Entry, in that case there was no question of challenging the assessment - further, no documentary evidence has been provided in relation to this aspect. Also the question of unjust enrichment has to be considered carefully since as per the Appellant the amount of such refund amount was also shown as receivables in Balance Sheet apart from certificate by the Chartered Accountant - Thus without expressing any views on merits of the case, it is deemed appropriate to send back both the appeals to the adjudicating authority for reconsidering the case afresh. Appeal allowed by way of remand.

Summary

Issues involved:
1. Refund of rubber cess on imported goods under Notification No. 96/2009 - Cus Dt. 11.09.2009.
2. Maintainability of refund claim due to non-challenge of assessment orders.
3. Application of Section 27 of the Customs Act for refund.
4. Unjust enrichment and burden passing to customers.
5. Show cause notice for recovery of sanctioned refund under Section 28 (1) and interest under Section 28AA (1) of the Customs Act, 1962.

Issue 1: The case involved appeals against orders related to the refund of rubber cess on imported goods under Notification No. 96/2009 - Cus Dt. 11.09.2009. The appellant, engaged in manufacturing tires, imported natural rubber and claimed exemption. The dispute arose when they were required to pay the rubber cess in cash despite claiming exemption. The Commissioner (Appeals) initially sanctioned the refund, but the revenue appealed, leading to conflicting decisions.

Issue 2: The main contention was the maintainability of the refund claim due to the non-challenge of assessment orders. The Appellate Authority held that since the assessment orders were not challenged, the refund claim was not maintainable. The appellant argued that since no duty was charged on the Bill of Entry, challenging the assessment was unnecessary. The case cited judgments to support their position.

Issue 3: The appellant relied on Section 27 of the Customs Act to support their claim for refund, emphasizing that the rubber cess was not paid in pursuance of assessment orders. They presented arguments and cited various judgments to strengthen their case, asserting that the burden of proof lay with the revenue.

Issue 4: Regarding unjust enrichment and the passing of the burden to customers, the appellant provided evidence to show that the cess paid "Under Protest" was accounted for as receivable from the government in their Balance Sheet. They argued that there was no unjust enrichment as the burden was not passed on to customers due to unchanged prices.

Issue 5: A show cause notice was issued for the recovery of the sanctioned refund along with interest under the Customs Act. The Principal Commissioner ordered the recovery of the refund amount, leading to further appeals and arguments from the appellant against the premature recovery action.

The judgment remanded both appeals to the adjudicating authority for reconsideration, emphasizing the need to consider all contentions, judgments, and facts presented by the appellant. The authority was instructed to carefully evaluate the issue of unjust enrichment and to allow the appellant to submit additional evidence in support of their case. The appeals were disposed of with a directive for de-novo consideration.