2024 (1) TMI 1174 - HC - Customs

Refund claim under Section 28D allowed when imported goods remain in use and not disposed of

Commissioner Of Customs (Port), Kolkata Versus M/s. Dredging Corporation Of India Limited

The HC dismissed the revenue's appeal regarding a refund claim under Section 28D of the Customs Act, 1962. The appellate authority accepted certificates ... Refund claim - principles of unjust enrichment - Proper appreciation of provision of Section 28D of the Customs Act, 1962 or not - verification of contents of provision of Section 28D of the Customs Act, 1962 - HELD THAT:- The appellate authority took note of the certificate issued by the Chartered Accountant dated 11.06.2015 wherein the Chartered Accountant again certified that all the goods brought under the cover of the three Bills of entries are still in use by the Dredging Corporation of India. The Director (Operations and Technical) of the assessee vide a letter dated 11.06.2015 certified that the vessel is in operation and has not been sold. Therefore, the appellate authority held that when the goods are still in use the question of passing the burden of duty does not arise and the question of unjust enrichment will not be applicable. While on this issue, it will be beneficial to refer to the decision in the case of COMMISSIONER OF C. EX., CHENNAI-I VERSUS SUPERINTENDING ENGINEER, TNEB [2011 (3) TMI 1500 - MADRAS HIGH COURT] wherein the Hon’ble Division Bench after taking note of the findings of the Hon’ble Supreme Court in paragraph 99 of the judgment in Mafatlal Industries held that there was no unjust enrichment even as regards the Government undertakings and following the same it was held that unjust enrichment is not applicable as far as the state undertakings are concerned. The learned tribunal after taking note of the factual position has conclusively held that the bar of unjust enrichment would not apply as the vessel in question is still in use and has not been sold or disposed of. Furthermore, the certificate issued by the Chartered Accountant was also taken note of which was not shown to be factually incorrect by the department. The appeal is dismissed and the substantial questions of law are answered against the appellant revenue. Issues:The issues involved in this case are the delay in filing the appeal and the interpretation of Section 28D of the Customs Act, 1962.Delay in Filing Appeal:The delay in filing the appeal was condoned after being properly explained, and the application was allowed.Interpretation of Section 28D of the Customs Act, 1962:The appeal raised substantial questions of law regarding the proper appreciation of Section 28D of the Customs Act, 1962, and whether the tribunal was required to verify the contents of this provision before upholding the order of the Commissioner (Appeals).The respondent, a Government of India undertaking, purchased a cutter suction dredger with accessories and spares from a Dutch firm for a dredging project. The customs authorities provisionally assessed the goods, leading to a dispute over the duty rate applicable to the spares. The tribunal, relying on a previous decision, accepted the assessee's case and allowed a refund claim. However, subsequent refund claims were challenged on grounds of limitation and unjust enrichment.The appellate authority considered the factual position, noting the long duration of the case and lack of evidence supporting unjust enrichment. It was highlighted that the vessel and its equipment were still in use, and no evidence suggested passing on the duty burden to consumers. The decision was supported by a certificate from a Chartered Accountant and a director of the assessee.The tribunal distinguished previous cases and emphasized the finality of the refund entitlement decisions. It concluded that unjust enrichment did not apply due to the vessel's ongoing use and lack of evidence supporting the department's contentions.The appellant department relied on Supreme Court decisions regarding refund principles and time limitations. However, the tribunal affirmed the appellate authority's decision, dismissing the appeal and answering the substantial questions of law against the appellant revenue.In conclusion, the appeal was dismissed based on the findings related to unjust enrichment and the finality of refund entitlement decisions, as supported by the factual position and relevant legal principles.