2024 (10) TMI 838 - AT - Customs

Refund claim of duty paid on short landing of goods - mischief of unjust enrichment - date of calculation of interest on refund claim. Unjust Enrichment in respect of the refund of duty paid on short landing of imported goods - HELD THAT - There is no dispute that the appellant have shown the refund amount as receivable in their books of accounts and a Chartered Accountant s certificate was issued to this effect. Therefore, firstly the duty paid in respect of goods which have not arrived in India therefore, question of passing ofthe incidence of duty does not arise. Secondly, the amount of duty so paid on the short landing of the goods was shown as receivable in the books of accounts which has been certified by a Chartered Accountant. On this issue, the Tribunal in the decision in the appellant s own case reported at M/S PETRONET LNG LTD. VERSUS CC AHMEDABAD 2011 (9) TMI 515 - CESTAT, AHMEDABAD already considered the issue of Unjust Enrichment and held that in thisfact Unjust Enrichment is not applicable. In view of the fact that the amount of refund has been shown as receivable which is supported by Chartered Accountant s certificate there is absolutely no doubt that the incidence of duty paid on short landing of goods has not been passed on to any other person. Therefore, there is no case of Unjust Enrichment against the assessee. Accordingly, the impugned order passed by the Learned Commissioner (Appeals) is absolutely legal and in order which does not require any interference and hence, the same is upheld, revenue s appeal is dismissed. From which date the interest on refund is applicable? - HELD THAT - From the judgment in MANISHA PHARMO PLAST PVT. LTD. VERSUS UNION OF INDIA 2020 (11) TMI 726 - SUPREME COURT , it can be seen that Landmark judgment of the Hon ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT was followed and held that the interest on refund is payable from 3 months of date of filing refund application. Therefore, the appellant are entitled for the interest on refund from the date after 3 months of filing a refund application. The impugned orders are set aside - Appeal allowed.

Summary

Issues involved:
1. Whether the appellant's refund claim of duty paid on short landing of goods is affected by unjust enrichment.
2. Whether the assessee is entitled to interest on the refund from the date of filing the refund application or from the date of the Commissioner (Appeals) order on the refund matter.

Analysis:
1. The first issue pertains to the unjust enrichment in the appellant's refund claim of duty paid on short landing of goods. The Revenue contended that the refund was rightly credited to the Consumer Welfare Fund due to the appellant's failure to provide proper documents to show that the duty incidence was not passed on. However, the Tribunal had previously held in the appellant's favor in a similar case, stating that unjust enrichment did not apply in cases of duty paid on short-landing goods. The Chartered Accountant's certificate and the appellant's book entries supported this claim, leading to the rejection of the Revenue's appeal and upholding of the Commissioner (Appeals) decision.

2. The second issue revolves around the entitlement to interest on the refund. The Revenue argued that interest should only be payable from the date of the Commissioner (Appeals) order, citing a Gujarat High Court judgment. However, the appellant relied on a Supreme Court judgment which overturned the High Court decision and established that interest on refunds should start accruing after 3 months from the date of filing the refund application. Consequently, the appellant was deemed entitled to interest from 3 months after the refund application filing date.

In conclusion, the Tribunal dismissed the Revenue's appeal concerning unjust enrichment, as the appellant had demonstrated that the duty incidence was not passed on and the refund was rightfully sanctioned. Additionally, the Tribunal allowed the assessee's appeal for interest on the refund, following the Supreme Court's ruling that interest should be calculated from 3 months after the refund application filing date. The impugned orders were set aside, and the assessee's appeals were allowed.