Tribunal rules excess Customs duty not unjust enrichment in M/s. Corning S.A. case

The Tribunal held that the bar of unjust enrichment was not applicable to the case of M/s. Corning S.A. as the excess Customs duty paid was shown as a deposit with Customs and had not been passed on to the buyers. The appeal was allowed, emphasizing that since the duty amount was accounted for as a current asset and not as a cost in the Profit & Loss Account, the burden of duty had not been transferred to the purchasers.

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Issues involved: Whether bar of unjust enrichment is applicable to the refund of Customs duty paid in excess.

Summary:
The appeal was filed by M/s. Corning S.A. regarding the refund of Customs duty paid in excess. The Appellants imported goods during 1997-2000 and were directed to clear the goods on payment of extra duty deposit. After finalization of bills of entry, they filed a refund claim which was rejected based on the bar of unjust enrichment. The Appellants argued that the bar of unjust enrichment does not apply to refunds from finalization of provisional assessment, as the duty amount was shown as 'Deposit with Customs' in their balance sheet and not as a cost in the Profit & Loss Account. They also provided a certificate from a Chartered Accountant to support their claim. The Tribunal considered the submissions and held that since the duty amount was accounted for as a current asset and shown as 'Deposit with Customs', the bar of unjust enrichment did not apply as the burden of duty had not been passed on to the buyers.

In the impugned Order, the Commissioner (Appeals) had noted that the entry in the balance sheet did not conclusively indicate that the duty amount sought for refund had not been treated as a cost of traded goods under expenses in the profit and loss account. However, the Tribunal found that since the duty amount was clearly shown as 'Deposit with Customs' and not charged as a cost in the Profit & Loss Account, the bar of unjust enrichment was not applicable. Citing a similar decision involving Maruti Udyog Ltd., where the duty amount was shown as other current assets and a certificate from a Chartered Accountant was submitted, the Tribunal allowed the appeal, stating that the burden of duty had not been passed on to the buyers.

Therefore, the Tribunal held that the bar of unjust enrichment was not applicable in the present case as the excess duty paid by the Appellants had been shown as a deposit with Customs and had not been passed on to the buyers. The appeal was allowed accordingly.

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