2009 (8) TMI 1065 - AT - Customs

Summary

Issues:
Whether the refund of fine and penalty is subject to the doctrine of unjust enrichment.

Analysis:
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) setting aside the original order. The case involved a Bill of Entry filed for the import of various items, including cosmetics of Chinese origin. The value of the cosmetic items was found to be mis-declared, resulting in an alleged duty evasion. The goods were confiscated, and redemption was allowed on a fine and penalty. The respondents filed a refund claim, which was initially credited to the Consumer Welfare Fund due to unjust enrichment concerns. However, the Commissioner (Appeals) allowed the refund claim, stating that it was beyond the scope of unjust enrichment and ordered the refund without crediting it to the Fund. The main issue was whether the refund of fine and penalty is subject to the doctrine of unjust enrichment.

During the hearing, the learned JDR for the Appellant cited a Supreme Court case stating that the doctrine of unjust enrichment applies to all cases, including redemption fine and penalty. On the other hand, the Advocate for the Respondent relied on a Bombay High Court case, distinguishing it from the Supreme Court case and arguing that the principle of unjust enrichment does not apply to the refund of redemption fine and penalty. After considering the arguments, the judge concluded that the ratio of the Bombay High Court case was applicable in this situation. The judge found that in the case of redemption fine and penalty, the doctrine of unjust enrichment is not applicable under the Customs Act, 1962. Consequently, the judge upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal.

In conclusion, the judgment clarified that in cases involving redemption fine and penalty, the doctrine of unjust enrichment does not apply under the Customs Act, 1962. The decision was based on the interpretation of relevant legal precedents and the specific circumstances of the case.