TaxTMI 
TaxTMI 
TaxTMI 
2009 (8) TMI 462
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....the appeal on 31-1-2006 while admitting the appeal this Court has framed the following substantial questions of law: (i) Whether the tribunal was right in directing the appellant to refund the duty paid by the Respondent, without application of the doctrine of unjust enrichment? (ii) Whether the Tribunal was right in deciding the case on the presumption that the demand of duty had arisen because of finalization of provisional assessment and not as contended by the appellant herein? (iii) Whether the Tribunal was right in overlooking the fact that the Doctrine of unjust enrichment can be invoked irrespective of the applicability of Section 11B of the Central Excise Act/Section 27 of the Customs Act? (iv) Whether in the light of the decision of the Hon'ble Apex Court in the case of Sahakari Khand Udyog Mandal Ltd. v. Commissioner of C.Ex. and Cus. reported in 2005 (181) E.L.T. 328 (S.C.), whether the impugned order of the Tribunal is sustainable? (v) Whether the provisions of Section 27 of the Customs Act are applicable to the case of provisional assessment under Section 18 of the Customs Act, 1962? 3. Brief facts leading to the filing of this appeal by the revenue are that res....
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.... incurred being more or less similar to duty paid and thereby concluding that the incidence of duty has not been passed on to the actual Customer and provisions of unjust enrichment would not be applicable. It is this order which is under challenge in the present appeal. 6. Sri. T.M. Venkata Reddy appearing for Revenue contends that refund had arisen as a result of reduction of tariff value and not due finalisation of provisional assessment and as such the Tribunal order is erroneous in holding that unjust enrichment is not applicable to the instant case. It is also contended that the Tribunal has not looked into the judgment of the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. v. Commissioner of C.Ex. & Cus. - 2005 (181) E.L.T. 328 (S.C.), wherein it has been held doctrine of unjust enrichment is based on the principle of equity and irrespective of applicability of the statutory provision the doctrine can be invoked to deny benefit to which a person is not otherwise entitled to. The learned standing counsel hence prays for allowing of the appeal by answering the questions of law in favour of the appellant. 7. Per contra Sri. Rajesh Chander Kumar contends ....
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.... their submission that they have not shown the amount of Customs duty in the invoices as per the trade practice and requirement of sales tax office. In the reply to the Show cause notice they have submitted that the concept of unjust enrichment is not applicable for the commodity like RBD Palmolein as it is traded so openly. They further submits that this commodity is not traded on cost plus basis, but the trading is based on numerous other factors and market forces, which change every hour and day. They have further submitted that they have sold the goods at a price lower then the cost plus customs duty. They have submitted a statement showing break up of rate of cargo operational costs, custom duty, profit/loss. This statement shows that they have sold the goods at a loss, which is much more than the refund claimed. Therefore, it is argued that the incidence of duty is borne by them. I do not want to go into the profit and loss making business of the importer, but generally speaking no firms will sell its goods at less than the cost price plus duty." 10. However, the Tribunal has merely accepted the plea put forward by the importer which was to the effect that the importer had ....
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....ort made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year; (b) in any other case, before the expiry of six months, from the date of payment of [duty and interest, if any, paid on such duty], in such form and manner as may be specified in the regulations made in this behalf and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 28C) as the applicant may furnish to establish that the amount of [duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such [duty and interest, if any, paid on such duty] had not been passed on by him to any other person: PROVIDED that where an application for refund has been made before the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991, such applications shall be deemed to have been made under this sub-section and the same shall be dealt with in accordance with the provisions of subsection (2): PROVIDED FURTHER that the limitation of one year or six months, ....
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....interest paid thereon by a person if it is paid pursuance to a provisional assessment. However, the said claim can be examined subject to the fulfillment of limitation of one year or six months as the case may be and this exercise is required to be undertaken by the Adjudicating Authority. In view of the matter having been remitted to the Adjudicating Authority we make it clear that the application for refund by the respondent shall be examined afresh on the basis of the available records and also examined as to whether the said application is filed in time and orders be passed thereon. 13. In the result, we pass the following: ORDER (a) The order of the Tribunal dated 11-2-2005 is hereby set aside as also the order of the Adjudicating Authority dated 14-2-2002 and the First Appellate Authority dated 16-10- 2002. (b) The matter is remitted to the Adjudicating Authority for adjudication afresh in the light of the observation made herein above which would be only on the basis of records available and placed by the importer as on the date of filing of refund application. (c) The Adjudicating Authority shall examine whether the said application is within the time limit of one yea....
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.... of 'unjust enrichment'. It is for this purpose, the matter is listed today. 18. We have heard Sri T.M. Venkatareddy, learned standing counsel for the appellant/revenue and Sri Rajeshchandra Kumar, learned counsel appearing for the respondent assessee. 19. Sri T.M. Venkatareddy, learned standing counsel for the appellant would draw our attention to para No. 48 of the judgment of the Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd v. Commissioner of Central Excise & Customs [2005 (181) E.L.T. 328 (S.C.)], which reads as under: "From the above discussion, it is clear that the doctrine of 'unjust enrichment' is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in the absence of a statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/appellant to show that he has pai....
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....nt in deposit can be suitably adjusted and at that stage, question of applicability of the doctrine of 'unjust enrichment' does not arise in terms of the judgment in 'Allied Photographics India Ltd.' He would therefore submit that with the present situation, not even indicating as to whether the stage was finalisation of provisional assessment or a mere deposit which was being adjusted and later on, further duty being paid etc., and in a case where it is an adjustment and the doctrine not applicable, and answering the question in the affirmative and in favour of the revenue, would virtually to some extent run counter to the ratio indicated by the Supreme Court in Allied Photographics India Ltd.'s case. Further, learned counsel for the assessee very fairly submits that a refund application under Section 27 would be tenable only in a situation where the assessment is finalised and not at the stage of a provisional assessment under Section18. 22. But, the difficulty in the present case, as submitted by the learned counsel for the assessee, is that the discussion by the authorities below does not necessarily indicate as to what exactly was the stage of assessment, whether it remained ....