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M/s. Spicer India Limited Versus Commissioner of Customs, Chennai-III

Refund - Order passed beyond the scope of show cause notice and decided the appeal on altogether different ground of admissibility of refund whereas the the appeal was on the bar of unjust enrichment - Adjudicating authority has already sanctioned the refund but credited into Consumer Welfare Fund applying the provisions of unjust enrichment. - Held that:- the refund is in respect of revenue deposit made by the appellant for provisional assessment of imports in terms of Section 18 of the Cus .....

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onal assessment. Therefore, the impugned order is not sustainable and set aside. - Decided in favour of appellant - Appeal No. C/68/2005 - Order No.A/87339/16/SMB - Dated:- 29-3-2016 - Shri Ramesh Nair, Member (Judicial) For the Petitioner : Shri Narendra Dave, C.A. For the Respondent : Shri D.K. Sinha, Asstt. Commr. (A.R) ORDER PER: RAMESH NAIR The appeal is directed against Order-in-Appeal No. 124/04 dt.6.10.2004 passed by Commissioner of Central Excise (Appeals) Chennai whereby the Ld. Commis .....

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appeal filed by the Revenue. The appellant filed refund claim in respect of 5% revenue deposit deposited during the provisional assessment with the respective authorities i.e. Mumbai, Pune, Hosur. The claim filed at Mumbai have been sanctioned and paid holding that the such amount being revenue deposit the provisions of Section 27 would not apply and consequently bar of unjust enrichment will also not applicable in such cases. The claim filed at Pune was sanctioned but credited to Consumer Welf .....

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Fund vide adjudication order dt. 17.6.2004. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) , who vide impugned order rejected the appeal. The Ld. Commissioner (Appeals) decided the case on the ground that the appellant have not challenged the order wherein the assessment order was finalized and relying on the judgment in the case of Priya Blue Industries Ltd. Vs. Commissioner of Central Excise 2004 (172) ELT 145 (S.C.) the appeal was rejected. Aggrieved .....

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he finalization of the provisional assessment. He further submits that the refund arose out of finalization of the provisional assessment which is in respect of 5% revenue deposit, therefore the refund falls under Section 18 of the Customs Act, 1962 whereunder during the period involved in the present case, the provision of unjust enrichment was not existing. The bar of unjust enrichment was inserted by way of Sub-section (5) of Section 18 w.e.f. 13.7.2006 whereas the period involved in the pres .....

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3 (156) ELT 161 (S.C.) and Circular No.744/60/2003-CX dt.11.9.2003. He further submits that in their own case the refund was allowed and matter travelled upto Supreme Court wherein under Civil Appeal No. 3000/2007, the Honble Supreme Court dismissed the Revenues appeal holding that doctrine of unjust enrichment will not apply to provisional assessment. 4. On the other hand, Shri D.K. Sinha, Ld. Assistant Commissioner (A.R. ) appearing on behalf of the Revenue reiterates the findings of the imp .....

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ided the case on the ground that the appellant have not challenged the assessment order in the light of Honble Supreme Court judgment in the case of Priya Blue Industries Ltd. (supra) whereas the adjudicating authority has already sanctioned the refund but credited into Consumer Welfare Fund applying the provisions of unjust enrichment. Against the sanction of the refund claim there is no appeal from the Revenue therefore Commissioner (Appeals) was not supposed to decide the case of admissibili .....

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ithstanding anything contained in this Act but without prejudice to the provisions contained in section 46 (a) where the proper officer is satisfied that an importer or exporter is unable to produce any document or furnish any information necessary for the assessment of duty on the imported goods or the export goods, as the case may be; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of d .....

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may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty finally assessed and the duty provisionally assessed. (2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then (a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of, 1[the dut .....

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al assessment if any amount falls in excess the importer shall be entitled to refund. However the bar of unjust enrichment was first time inserted under Section 18 by way of Sub-Section (5) w.e.f. 13.7.2006 which reads as under: (5) The amount of duty refundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to (a) the duty and interest, if .....

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rt duty as specified in section 26; (e) drawback of duty payable under sections 74 and 75.] From the above, it is clear that at the time of provisional assessment the bar of unjust enrichment in case of a refund arising on finalization of the assessment was not applicable. Therefore, the lower authority has wrongly credited the sanctioned refund in the Consumer Welfare Fund. In the judgment of Mafatlal Industries (supra) the Honble Supreme Court in para 95 observed as under: 95.Rule 9B provides .....

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nally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is e .....

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