TMI Blog2015 (6) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... r as a refund claim, there being no evidence to the effect that the letter was not received by the Department. Even the order of the Assistant Commissioner does not categorically state that the letter dt. 28.3.1997 was not received by the department. Therefore, since the department did not challenge the Commissioner (Appeals) order, the refund for this period is not time barred. The contention of the appellant is also that the Bombay High Court order dt. 5.5.1997 setting aside the order of finalization dt. 9.8.1996 restores the status of provisional assessment in respect of all Bills of Entry filed upto the date of the High Court order and till the conclusion of the fresh adjudication proceedings. This contention merits acceptance because the High Court directed to continue the Bank Guarantee. In this view of the matter, we hold that the assessments were provisional and the question of payment of duty under protest did not arise. Whether the test of unjust enrichment will apply to provisional assessments - Held that:- in view of the various judgments the test of unjust enrichment will not apply to provisional assessments before 13.7.2006 when sub-section(5) to Section 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner denied the benefit of notification No. 64/1995 and directed the appellant to pay differential duty on goods cleared during the period 16.5.1995 to 23.1.1996. On a writ petition filed by the appellant, the Honble Bombay High Court set aside the order dt. 9.8.1996 and remanded the case for fresh adjudication. This time the Assistant Commissioner extended the benefit of Notification No. 64/95 vide his order dt. 25.7.1997. In appeal, the Commissioner (Appeals) vide order dt. 27.10.1999, set aside the Order-in-Original dt. 25.7.1997 and remanded the case to the Assistant Commissioner for de novo consideration. However, the appellant preferred an appeal to CESTAT who vide Order No. C-II/1585-86/2000/WZB dt. 1.6.2000 set aside the Order-in-Appeal and restored the Order-in-original dt. 25.7.97 passed by the Commissioner (Appeals). Thus, on merits, the issue attained finality. As the department had levied full rate of duty on the goods cleared during the period 25.1.96 to 16.2.97, the appellant vide letters dt. 28.3.97, 3.1.98 and 15.4.98 requested for refund of excess duty of ₹ 37,00,44.42 for the period Jan96 to Feb 97 which amount was later revised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisionally. 3.2. The Ld. Counsel relied on the following judgments holding that principles of unjust enrichments are not applicable to refunds arising out of finalization of provisional assessment: (a) Scientific Instruments Co. Vs. Commissioner of Customs 2012 (286) ELT 261 (Tri. Chennai). (b) Commissioner of Customs Kandla Vs. Hindustan Zinc Ltd. 2009 (235) ELT 629 ( Tri. LB). (c) Oriental Exports Vs. Commissioner 2006 (200) ELT A138 (SC). 4. The Ld. AR reiterated the findings of the Commissioner. He referred to the letter dt. 1.3.1998 of the appellant addressed to the Assistant Commissioner regarding the refund claim and stated that there is no mention of duty payment under protest. According to him, the show cause notice dt. 30.10.1998 to the appellant proposed rejection because the appellant had paid the duty without any protest for the clearances effected during the period January 96 to February 97 and did not request for provisional assessment. He relied on the judgement of Honble Supreme Court in the case of Bussa Overseas and Properties Pvt. Ltd. Vs. UOI 2004 (164) ELT A177 (SC) in which the Honble Apex Court dismissed the partys SLP a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The next issue to be decided is whether the test of unjust enrichment will apply to provisional assessments. The appellant have submitted various judgments to support their stand that the test of unjust enrichment will not apply to provisional assessments before 13.7.2006 when sub-section(5) to Section 18 was introduced. Sub-Section 18(5) brought the concept of unjust enrichment into Section 18. We have seen these judgments. In the case of Hindustan Zinc Ltd. (supra) the Larger Bench had considered the judgment of the Honble Supreme Court in Allied Photographic case 2004 (166) ELT 3 (S.C.) and came to the conclusion that unjust enrichment is not applicable to refunds arising out of finalization of provisional assessments prior to 13.7.2006. This view is also obtained from the Supreme Court judgement in the case of Oriental Exports (supra) which upheld the CESTAT judgement to the effect that the doctrine of unjust enrichment is not applicable to the provisional assessments even after the finalization thereof. However we note that the case of Allied Photograhic was in the context of provisions of Central Excise Law. The judgement in the case of Oriental Exports also referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 27 of the Customs Act. Explanation II to Section 27 of the Customs Act (Explanation 1 prior to 1-8-1998) provides that to obtain refund of any duty paid provisionally under Section 18, an application for refund must be made within the period of limitation prescribed therein. The limitation prescribed under Section 27 of the Customs Act requiring filing of an application for refund of duty arising on finalisation of the provisional assessment in the case of import made by any individual for his personal use or by Government or by any educational research or charitable institution or hospital, is, before the expiry of one year and in any other case before the expiry of six months from the date of adjustment of duty after the final assessment. In other words, the refund of duty arising on finalisation of the provisional assessment is governed by the limitation prescribed under Section 27 of the Customs Act. Therefore, even though the Petitioners are entitled to the refund on finalisation of the assessment under Section 18, to obtain that refund, the Petitioners are required to make an application within the period of limitation prescribed under Section 27 of the Customs A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 27 of the Customs Act are not applicable. There is a sound reason behind it. Under the Customs Act, since inception, the recoveries or refund arising on finalisation of the provisional assessment have been expressly subjected to the limitation prescribed under Section 27 of the Customs Act. Initially Explanation I to Section 27 provided for the limitation to claim refund of duty provisionally assessed under Section 18 of the Customs Act. By Act 21 of 1998 (with effect from 1-8-1998), the Explanation I to Section 27 has been renumbered as Explanation II. Thus, under the Customs Act, the refund of duty arising on finalisation of the provisional assessment has always been subject to the procedure prescribed under Section 27 of the Customs Act. 32. As stated hereinabove, provisions of Excise law were different at the material time. Explanation to Section 11B(1) of the Central Excises Salt Act, 1944, as enacted originally provided that the refund arising on finalisation of provisional assessment will be subject to the limitation prescribed under Section 11B of the Excise Act. That explanation to Section 11(B)(1) was omitted by Act 44 of 1980. As a result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the refunds arising on finalisation of provisional assessment within the purview of Section 27 of the Customs Act. ... 36. It is true that the Tribunal in the case of Alcatel Modi (supra) following the decision of the Apex Court in the case of Mafatlal Industries has held that the refund of duty or recovery of duty as a result of the finalisation of provisional, assessment has to be given suomotu by the Customs authorities. The decision of the Tribunal is based on total misreading of the law laid down by the Apex Court in the case of Mafatlal Industries. As stated hereinabove, the ratio laid down by the Apex Court in Mafatlal Industries (supra) is that in respect of refunds arising under Rule 9B(5), the provisions of Section 11B of the Central Excise Act are not applicable. That was the position in law under the Central Excise Act at the relevant time. But, that was not the position under the Customs Act, because Section 27 of the Customs Act has always been made applicable to the refunds arising under Section 18 of the Customs Act. Moreover, now the Excise Law has been amended so as to bring the Excise Law on par with the Customs Act. Under the circumstances, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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