2017 (1) TMI 1450 - AT - Customs

Tribunal grants refund for excess customs duty citing unjust enrichment principle

Jajoo Surgical Pvt. Ltd. Versus C.C.E. Indore

The Tribunal allowed the appeal filed by M/s Jajoo Surgical Pvt. Ltd., holding that the appellant was entitled to claim a refund for the excess basic ... Refund of excess Customs duty - duty paid in cash which had earlier been sanctioned by the Assistant Commissioner but was reversed by the impugned order - unjust enrichment - Held that: - The appellant relies on Hon’ble Delhi High Court’s decision in the case of Aman Medical Products Ltd. Vs. Commissioner of Customs, Delhi [2009 (9) TMI 41 - DELHI HIGH COURT], where it was held that where there is no contest or lis between the importer and the customs regarding the rate of duty and where there is no assessment order issued by the Customs there could be no challenge or appeal to such order; in such a situation the importer will not be deprived of his right to file refund claim - refund allowed - appeal allowed - decided in favor of appellant. Issues:Refund of customs duty paid in cash, Principles of unjust enrichment, Assessment order requirement for filing appeal and refund claim, Interpretation of Section 27 of the Customs Act, 1962.Refund of Customs Duty Paid in Cash:The case involved an appeal against the reversal of a refund claim of basic customs duty paid in cash by M/s Jajoo Surgical Pvt. Ltd. The appellant paid duty at 5% ad valorem instead of the applicable 2.5% rate. The appellant did not pass on the duty burden to buyers and provided a certificate from a Chartered Accountant to support this. The issue revolved around the unjust enrichment principle, with the Tribunal finding that the appellant was entitled to claim a refund for the excess payment made.Assessment Order Requirement for Filing Appeal and Refund Claim:The Revenue contended that the appellant should have first filed an appeal against the assessment order for the imported goods before claiming a refund. However, the appellant argued that since there was no dispute between the importer and the Revenue regarding the duty rate, and no assessment order was issued, there was no basis for an appeal. Citing a Delhi High Court decision, the appellant asserted that the absence of a contested assessment order did not deprive them of the right to file a refund claim. The Tribunal agreed, emphasizing that the non-filing of an appeal against the assessed bill of entry did not prevent the appellant from claiming a refund under Section 27 of the Customs Act, 1962.Interpretation of Section 27 of the Customs Act, 1962:The Tribunal analyzed Section 27 of the Customs Act, 1962, which outlines the procedure for claiming a refund of duty. It noted that previous judgments requiring an assessment order for filing a refund claim were not applicable in cases where no assessment order was in dispute. Relying on the provision of Section 27, the Tribunal held that the appellant's refund claim was maintainable under clause (ii) of sub-section (1) of Section 27, and the failure to appeal against the bill of entry assessment did not bar the refund claim. By interpreting the relevant legal provisions and considering the Delhi High Court's decision, the Tribunal set aside the impugned order and allowed the appeal, granting consequential benefits to the appellant.This detailed analysis of the judgment highlights the key legal issues addressed by the Tribunal, including the refund of customs duty, the requirement of an assessment order for appealing and claiming a refund, and the interpretation of Section 27 of the Customs Act, 1962, providing a comprehensive overview of the decision rendered.