2019 (12) TMI 569 - AT - Customs

Imported Goods Rubber Cess Refund Appeal: Key Issue Unjust Enrichment

M/s. Balkrishna Industries Ltd. Versus C.C. Mundra

M/s. Balkrishna Industries Ltd. Versus C.C. Mundra - TMI Issues involved:1. Refund of rubber cess on imported goods under Notification No. 96/2009 - Cus Dt. 11.09.2009.2. Maintainability of refund claim due to non-challenge of assessment orders.3. Application of Section 27 of the Customs Act for refund.4. Unjust enrichment and burden passing to customers.5. Show cause notice for recovery of sanctioned refund under Section 28 (1) and interest under Section 28AA (1) of the Customs Act, 1962.Issue 1: The case involved appeals against orders related to the refund of rubber cess on imported goods under Notification No. 96/2009 - Cus Dt. 11.09.2009. The appellant, engaged in manufacturing tires, imported natural rubber and claimed exemption. The dispute arose when they were required to pay the rubber cess in cash despite claiming exemption. The Commissioner (Appeals) initially sanctioned the refund, but the revenue appealed, leading to conflicting decisions.Issue 2: The main contention was the maintainability of the refund claim due to the non-challenge of assessment orders. The Appellate Authority held that since the assessment orders were not challenged, the refund claim was not maintainable. The appellant argued that since no duty was charged on the Bill of Entry, challenging the assessment was unnecessary. The case cited judgments to support their position.Issue 3: The appellant relied on Section 27 of the Customs Act to support their claim for refund, emphasizing that the rubber cess was not paid in pursuance of assessment orders. They presented arguments and cited various judgments to strengthen their case, asserting that the burden of proof lay with the revenue.Issue 4: Regarding unjust enrichment and the passing of the burden to customers, the appellant provided evidence to show that the cess paid 'Under Protest' was accounted for as receivable from the government in their Balance Sheet. They argued that there was no unjust enrichment as the burden was not passed on to customers due to unchanged prices.Issue 5: A show cause notice was issued for the recovery of the sanctioned refund along with interest under the Customs Act. The Principal Commissioner ordered the recovery of the refund amount, leading to further appeals and arguments from the appellant against the premature recovery action.The judgment remanded both appeals to the adjudicating authority for reconsideration, emphasizing the need to consider all contentions, judgments, and facts presented by the appellant. The authority was instructed to carefully evaluate the issue of unjust enrichment and to allow the appellant to submit additional evidence in support of their case. The appeals were disposed of with a directive for de-novo consideration.