2024 (10) TMI 1553 - AT - Customs

Benefit of exemption under Notification No. 46/2011-Cus. denied by Customs on re-assessment - Refund claim hit by limitation and issue of unjust enrichment not raised in Show Cause Notice - unjust enrichment - HELD THAT - We find that the Appellant has filed the above said Bills of Entry by claiming the benefit of Notification No. 46/2011-Cus. dated 01.06.2011. While re-assessing the said Bills of Entry in RMS, the benefit of exemption as envisaged in the said Notification was not allowed. This mistake was rectified by the Commissioner (Appeals) in the Order-in-Appeal dated 02.03.2017, as per Section 154 of the Customs Act, 1962. The stay application filed by the department against this order has also been rejected by the Tribunal. Further, we observe that the Appeal filed by the Department against the Order dismissed vide Final Order. Consequent to the Tribunal s Order rejecting the stay against the order dated 02.02.2017 passed by the Commissioner (Appeals), the refund amount of Rs.4,87,208/- was sanctioned and paid to the Appellant on 23.12.2019. We observe that the Assistant Commissioner has sanctioned the refund as per the order dated 02.03.2017 passed by the Commissioner (Appeals), which he is legally bound to implement. Thus, we observe that there is no infirmity in sanctioning the refund by the Assistant Commissioner. Show Cause Notice dated 11.07.2018 was issued to reject the refund claim already sanctioned. On appeal, the Commissioner (Appeals) brought in the unjust enrichment angle and vide the impugned order, directed the adjudicating authority to re-examine the issue and remanded the matter back to the adjudicating authority. We observe that the issue of unjust enrichment was never raised in the Show Cause Notice dated 11.07.2018. Commissioner (Appeals) has gone beyond the scope of the Show Cause Notice and set aside the Order-in-Original and remanded the matter back to the adjudicating authority to re-examine the issue afresh. Assistant Commissioner has sanctioned the refund claim as per the Order-in-Appeal passed by the Ld. Commissioner (Appeals) who has allowed re-assessment within the meaning of Section 154 of the Customs Act, 1962. This would mean that the benefit of Notification No. 46/2011 existing at the time of the Bills of Entry is available to the appellant and hence the excess payment made by them is liable to be refunded. We also observe that the stay application filed by the Department against the order dated 02.03.2017 has been rejected by the CESTAT. Thus, there was no bar in implementation of the order of the Commissioner (Appeals). Thus, we do not find any infirmity in the order passed by the Assistant Commissioner sanctioning the refund claimed by the Appellant. Show Cause Notice was issued to the appellant on 11.07.2018 alleging that the refund claim filed by them on 27.04.2018, on the basis of the Order-in-Appeal dated 02.03.2017 was hit by limitation. The unjust enrichment issue was not raised in the Notice. We find that in the Order-in-Original dated 24.09.2019, the Ld. Assistant Commissioner has examined the issue of unjust enrichment and given a finding that there was no unjust enrichment existing in this case. We observe that the Ld. Commissioner (Appeals) has not given any observation against the finding on the issue of unjust enrichment given by Assistant Commissioner in the said Order-in-Original. Since the Ld. Assistant Commissioner has already examined the issue of unjust enrichment and given a finding on the issue and there is no contrary finding given by the Ld. Commissioner (Appeals) in the impugned order, we are of the view that there is no need to re-examine the issue again by the Assistant Commissioner. Accordingly, we hold that the impugned order passed by the Commissioner (Appeals) is legally not tenable and hence we set aside the same.

Summary

Issues:
1. Benefit of exemption under Notification No. 46/2011-Cus. denied by Customs on re-assessment.
2. Refund claim hit by limitation and issue of unjust enrichment not raised in Show Cause Notice.

Analysis:
1. The appeal was filed by M/s. Gattani Industries against the Order-in-Appeal remanding the matter back to the adjudicating authority due to denial of the benefit of Notification No. 46/2011-Cus. The Appellant claimed eligibility for the exemption but was denied by the Assessing Officer. The Ld. Commissioner (Appeals) allowed the refund of Customs Duty, which was upheld by the Tribunal. The refund amount was paid to the Appellant. Another Show Cause Notice was issued later, alleging limitation on the refund claim, which was sanctioned by the Ld. Assistant Commissioner without finding unjust enrichment. The Ld. Commissioner (Appeals) set aside this order and remanded the matter to re-examine all issues, including unjust enrichment, not raised in the Notice.

2. The Appellant argued that their eligibility for the exemption was not in question, and the Assessing Officer's mistake was rectified by the Ld. Commissioner (Appeals). The Department's stay application against this order was rejected, and the refund was paid. The Ld. Commissioner (Appeals) went beyond the Show Cause Notice by raising the issue of unjust enrichment. The Tribunal found no infirmity in sanctioning the refund and set aside the Ld. Commissioner (Appeals) order due to lack of need for re-examination by the Assistant Commissioner. The issue of unjust enrichment was addressed and no contrary finding was given, making the Ld. Commissioner (Appeals) order legally untenable. The Tribunal allowed the appeal and set aside the impugned order.

This detailed analysis covers the issues of denial of exemption, refund claim limitations, and unjust enrichment, providing a comprehensive understanding of the legal judgment.