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

The HC dismissed the revenue's appeal regarding a refund claim under Section 28D of the Customs Act, 1962. The appellate authority accepted certificates from a Chartered Accountant and Director confirming that goods imported under three Bills of Entry remained in use by the Dredging Corporation and the vessel had not been sold. The court held that unjust enrichment principles do not apply when goods remain in use and have not been disposed of, particularly for state undertakings. Following precedent from a SC decision in Mafatlal Industries, the court ruled that the bar of unjust enrichment would not apply to the refund claim.

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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.

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