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of <h1>Tribunal rules no interest on pre-2006 Customs Act assessments, rejects unjust enrichment doctrine</h1> The Tribunal held that interest is not payable on finalization of Bills of Entry for provisional assessments conducted before the 2006 amendment of the ... Interest on delayed refund of excess duty paid - provisional assessments - violation of principles of unjust enrichment - HELD THAT:- There are no doubt whatsoever on the non-applicability of interest for the provisional assessments undertaken before the amendment in Section 18 in 2006. Therefore, to this extent, the impugned orders do not survive and are liable to be set aside. Moreover, it is found that the approach of the learned Commissioner (Appeals) is in violation of the principle of judicial discipline. As no stay was granted as on that date against the order of the Tribunal, the learned Commissioner (Appeals) was bound by the decision of the Tribunal. Applicability of bar of unjust enrichment in respect of provisional assessments before 2006 - HELD THAT:- Karnataka High Court in the MANGALORE REFINERY AND PETROCHEMICALS LTD. VERSUS COMMISSIONER OF CUSTOMS, MANGALORE [2015 (5) TMI 768 - KARNATAKA HIGH COURT] have set the matter to rest holding that bar of unjust enrichment is not applicable to the cases of provisional assessments before the amendment in 2006. Refund of duty paid on import of spare parts before 2003 - HELD THAT:- The learned counsel for the appellants has categorically submitted that there was no case where they have imported at a price higher than the price at which the independent /unrelated entities have imported the spare parts. Therefore, the observations of the SVB order are superfluous and not applicable as far as the imports in 2002 or before are concerned. Therefore, there are no basis in the conclusions arrived at in Order-in-Original and Order-in-Appeal. Appeal disposed off. Issues:1. Liability of interest on finalization of Bills of Entry for provisional assessments.2. Applicability of unjust enrichment in cases of provisional assessments before 2006.3. Appropriation of excess duty paid towards interest.4. Refund of excess duty paid on import of spare parts.Analysis:Issue 1: Liability of interest on finalization of Bills of Entry for provisional assessmentsThe appellants contended that interest is not payable on finalization of Bills of Entry for provisional assessments conducted before the amendment of Section 18(3) of the Customs Act in 2006. They cited various case laws to support their argument. The Tribunal, after considering the arguments, referred to judgments by the Madras High Court and Gujarat High Court, which held that interest cannot be charged on differential duty assessed upon final assessment for provisional assessments undertaken before the amendment. The Tribunal agreed with this view and set aside the orders imposing interest.Issue 2: Applicability of unjust enrichment in cases of provisional assessments before 2006The Tribunal examined the issue of unjust enrichment in cases of provisional assessments before 2006. Referring to a judgment by the Karnataka High Court, it concluded that the doctrine of unjust enrichment does not apply to refund claims under Section 18 of the Act for provisional assessments conducted before the amendment. The Tribunal found no basis for the conclusions in the original orders and set them aside based on the judgments of the High Courts of Madras and Gujarat.Issue 3: Appropriation of excess duty paid towards interestThe appellants argued against the appropriation of excess duty paid towards interest under Section 18(3) despite a stay granted by the CESTAT. The Tribunal found this appropriation incorrect and set it aside, highlighting that the learned Commissioner was bound by the Tribunal's decision in the absence of a stay.Issue 4: Refund of excess duty paid on import of spare partsThe Tribunal analyzed the import of spare parts by the appellants and found that they did not import at a higher price than unrelated entities, making the observations in the SVB order irrelevant for imports before 2003. Based on this analysis and the judgments of the High Courts, the Tribunal concluded that no interest could be charged on finalization of provisional assessments initiated before 2006. Consequently, it set aside the impugned orders related to various appeals and dismissed the revenue appeal.In conclusion, the Tribunal allowed the appeals related to the issues discussed and dismissed the revenue appeal, providing consequential relief as per law.
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