2023 (2) TMI 623 - AT - Customs

Sanctioned amount of refund has been rightly credited to the Consumer Welfare Fund or not - Amount was deposited under protest - principles of unjust enrichment - HELD THAT - The order of court below is erroneous and in the teeth of the ruling of Hon ble Supreme Court in the case of U.O.I. VERSUS SUVIDHE LTD. 1996 (8) TMI 521 - SC ORDER . Admittedly, the amount under refund claim were deposited partly during investigation and partly during pendency of the 1st appeal. Further, it is evident that the Appellant did not agree with revenue and have contested the SCN as well as the adjudication order. The amount deposited are found to be deposited under protest, ipso facto. Further, these amounts are also in the nature of pre-deposit - the burden of unjust enrichment is not attracted. The Adjudicating Authority is directed to grant the refund with interest @ 12% per annum from the date of deposit till the date of refund - Appeal allowed.

Summary

Issues:
Whether the sanctioned refund amount was rightly credited to the Consumer Welfare Fund.

Analysis:
The case involved the question of whether the sanctioned refund amount should be credited to the Consumer Welfare Fund. The Appellant, engaged in processing and exporting rice, had imported machinery against Agri Infrastructure Incentive Scrips. The Directorate of Revenue Intelligence (DRI) initiated an investigation, leading to the Appellant depositing a significant sum. A show cause notice was issued, and an Order-in-Original confirmed duty benefits availed during import, along with penalties. The Appellant appealed, and the Commissioner (Appeals) set aside the original order. The Appellant then filed a refund claim, which was denied due to unjust enrichment concerns. The Appellant contended that the duty burden had not been passed on, citing precedents and the nature of the deposits made. The Commissioner (Appeals) held that the burden had indirectly been passed on, rejecting the appeal.

The Appellant, unsatisfied with the decision, appealed to the Tribunal. The Appellant argued that the deposits were made under protest, after a significant period post-import, and as capital goods not intended for sale, the burden of duty had not been transferred. Citing legal precedents, the Appellant contended that unjust enrichment did not apply to such deposits. The Tribunal, considering the arguments, found the lower court's decision erroneous. Acknowledging the nature of the deposits and the Appellant's contestation of the revenue's claims, the Tribunal held that unjust enrichment was not applicable. The appeal was allowed, directing the refund with interest to be granted within a specified timeframe.

In conclusion, the Tribunal ruled in favor of the Appellant, overturning the previous decision and directing the refund with interest to be disbursed promptly. The judgment highlighted the significance of the nature of deposits made under protest and the contestation of revenue claims in determining the applicability of unjust enrichment in refund cases.