2013 (10) TMI 1107 - AT - Customs

Tribunal upholds refund order in unjust enrichment dispute, Revenue's appeal dismissed

COMMISSIONER OF CUSTOMS (IMPORT) Versus E-MERCK (INDIA) LTD

The Tribunal dismissed the Revenue's appeal against the order sanctioning the refund of duty to the respondent, upholding the decision of the learned ... Refund of duty - unjust enrichment - The case of the department is that the lower authorities while deciding the question of unjust enrichment have not taken into consideration the fact that during 2001 if the amount receivable was Rs.1411.0 lakhs whereas during 2003 the amount receivable was Rs.496.0 lakhs. The grievance of the department is that the respondent has not shown the breakup of Rs.496.0 lakhs and has also not shown that the said amount covered the amount of Rs.13,09,506/- which was to be refunded. - Held that:- If the department had any doubt in this regard nothing prevented them to investigate and establish that the amount of Rs.13,09,506/- is not covered in Rs.496.0 lakhs. Since the department has not taken any step before or after filing the appeal to find out whether Rs.13,09,506/- lakhs was covered/not covered under Rs.496.0 lakhs. Crying fire is of no avail if one cannot show even a streak of smoke. In these circumstances, I do not find any reason to interfere with the concurrent findings of the lower authorities. Therefore, the learned Commissioner (Appeals) order is upheld - Decided against Revenue. Issues:- Appeal against order sanctioning refund of duty- Application of doctrine of unjust enrichmentAnalysis:1. Appeal against order sanctioning refund of duty:The appeal was filed by the Revenue against the order-in-appeal upholding the refund of duty to the respondent. The case involved the import of Washing and Siliconizing Machines under Project Import, which led to a demand for payment of differential duty. The respondent challenged this demand, and the lower adjudicating authority sanctioned a refund of Rs.13,09,506/-, which was later upheld by the learned Commissioner (Appeals). The Revenue contested this decision, arguing that the doctrine of unjust enrichment was not properly applied. However, the learned Commissioner (Appeals) considered the facts and rejected the Revenue's appeal, leading to the current appeal before the Tribunal.2. Application of doctrine of unjust enrichment:The main contention of the Revenue was related to the balance sheet discrepancies for the years 2001 and 2003. They argued that the lower authorities did not adequately examine the details of the balance sheets to determine if the refund amount was covered under the receivable amounts. The respondent, on the other hand, contended that the duty amount was recovered by the department through encashing a bank guarantee and should not be subject to unjust enrichment. The Tribunal noted that the amount in question was realized through the bank guarantee and that the refund was not disputed by either party. The Tribunal found that the lower authorities had considered the relevant aspects, and the department failed to provide evidence to show that the refund amount was not covered under the receivable amounts. Therefore, the Tribunal upheld the decision of the learned Commissioner (Appeals) and dismissed the appeal, stating that the department did not take any steps to establish their claim and that there was no reason to interfere with the lower authorities' findings.In conclusion, the Tribunal dismissed the appeal as devoid of merits and upheld the decision of the learned Commissioner (Appeals) regarding the refund of duty. The counter styled as Cross Objection filed by the respondent was also disposed of accordingly.