2023 (12) TMI 384 - AT - Customs

Revenue's appeal dismissed as manufacturer's refund claim under Notification 55/2011-Cus allowed without unjust enrichment bar

CESTAT Kolkata dismissed Revenue's appeal regarding refund claim rejection. Respondent initially paid full customs duty without Certificate of Country of ... Refund of excess customs duty on production of retroactive Certificate of Origin under Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules, 2011 and Notification No.55/2011-Cus (NT) - Applicability of ITC Limited (2019) decision on refund claims without challenge/modification of assessment - Bar of unjust enrichment under Section 27(2) of the Customs Act, 1962 - Amendment of Bills of Entry under Section 149 of the Customs Act, 1962Applicability of ITC Limited (2019) decision on refund claims without challenge/modification of assessment - Refund of excess customs duty on production of retroactive Certificate of Origin under Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules, 2011 and Notification No.55/2011-Cus (NT) - Decision in ITC Limited (supra) is not applicable where importer obtained a Certificate of Country of Origin retroactively and filed refund claims within the period permitted by Notification No.55/2011-Cus (NT). - HELD THAT: - The respondent had imported goods and paid applicable customs duty at the time of presentation of 27 Bills of Entry between 14.05.2018 and 27.05.2019 because no Certificate of Country of Origin was then available. Thereafter the respondent obtained retroactive Certificates of Origin in terms of the Implementing Procedures under the CEPA Rules and filed refund claims within twelve months of the Bills of Entry as permitted by Notification No.55/2011-Cus (NT). The Tribunal held that ITC Limited (supra), which precludes refund without challenge/modification of assessment, is not attracted where entitlement to preferential tariff arises only upon subsequent production of a retroactive certificate and where the statutory procedure permits refund on such production within the prescribed period. The rejection of the refund claims solely by applying ITC Limited was therefore unsustainable and the refund claims were allowed. [Paras 11, 12]ITC Limited (2019) decision is not applicable; refund claims allowed on production of retroactive Certificate of Origin filed within the period permitted by Notification No.55/2011-Cus (NT).Bar of unjust enrichment under Section 27(2) of the Customs Act, 1962 - Bar of unjust enrichment does not apply where the importer is a manufacturer who used the imported goods as raw material to manufacture exportable final products and the adjudicating authority's finding to that effect was not challenged. - HELD THAT: - The adjudicating authority recorded a specific finding based on the importer's declaration and factual circumstances that the duty incidence was borne by the importer and not passed on to any other person because the imported materials were used as raw materials to manufacture graphite electrodes which the respondent exports. The Revenue did not challenge that finding in appeal and it therefore attained finality. Given the unchallenged finding and the respondent's status as a manufacturer using the imported goods in exported final products, the Tribunal held that the bar of unjust enrichment under Section 27(2) of the Customs Act, 1962 was not attracted and did not preclude the refund. [Paras 15, 16, 17, 18, 19]Unjust enrichment bar does not apply; the adjudicating authority's finding is final and respondent has cleared the unjust enrichment requirement.Final Conclusion: The Revenue's appeal is dismissed and the respondent's cross-objection is allowed: the refund claims filed on production of retroactive Certificates of Origin within the period permitted by Notification No.55/2011-Cus (NT) are sanctioned, the ITC Limited precedent is inapplicable on these facts, and the bar of unjust enrichment does not stand in the way; the adjudicating authority is directed to act in accordance with law within 60 days. Issues Involved:1. Applicability of the ITC Limited judgment.2. Applicability of the bar of unjust enrichment.Issue (a): Applicability of the ITC Limited JudgmentThe Tribunal examined whether the decision of ITC Limited Vs. Commissioner of Central Excise, Kolkata IV reported in 2019 (360) ELT 216 (S.C.) was applicable to the present case. The respondent had filed 27 Bills of Entry for importing goods from Japan and paid customs duty at the time of assessment. Later, the respondent obtained the Certificate of Country of Origin retroactively and filed refund claims under Notification No.55/2011-Cus (NT) dated 01.08.2011. The Tribunal noted that the Notification allows for the issuance of the Certificate of Origin retroactively and permits filing refund claims within twelve months from the date of filing the Bills of Entry. Since the respondent was not entitled to claim the refund at the time of filing the Bills of Entry but did so upon obtaining the Certificate of Origin, the Tribunal held that the ITC Limited judgment was not applicable. Therefore, the rejection of the refund claim based on the ITC case was deemed unsustainable. The refund claims filed by the respondents were allowed.Issue (b): Applicability of the Bar of Unjust EnrichmentThe Tribunal also addressed whether the bar of unjust enrichment was applicable. The adjudicating authority initially found that the respondent, being a manufacturer who uses the imported goods to produce Graphite Electrodes for export, had not passed on the incidence of duty to any other person. This finding was not challenged by the Revenue and thus attained finality. The Tribunal further noted that since the respondent uses the imported goods in manufacturing and exports the final product, the question of unjust enrichment does not arise. The Tribunal held that the respondent had passed the bar of unjust enrichment and was entitled to the refund as prayed. The adjudicating authority was directed to process the refund within 60 days.ConclusionThe appeal filed by the Revenue was dismissed, and the Cross Objection filed by the respondent was allowed with consequential relief.