Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs vs Hindalco Industries Ltd. on 3 February, 2006
ORDER Chittaranjan Satapathy, Member (T)
1. This is a Revenue appeal against the order of the lower appellate authority who has held that the bar of unjust enrichment is not applicable to cases of provisional assessment under the Customs Act, 1962.
2. Heard both sides. Shri Vimlesh Kumar, learned S.D.R. appearing for the department refers to the three judges Bench decision of the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. v. Commissioner of C. Ex. & CMS. to argue that even in the absence of a specific provision in the law, a person cannot claim or retain undue benefit. Paragraph 48 of the said decision reads as under:
48. 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 of this doctrine. That, however, does not mean that in absence of 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 paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss.
3. Shri Kansara, learned Advocate appearing for the respondents states that in the instant case the assessments were provisional and that under Section 18 of the Customs Act, 1962 refund arising after finalization of the assessment is admissible. He cites the decision of the three Judges Bench of the Hon'ble Supreme Court in the case of Commissioner of C. Ex., Mumbai-II v. Allied Photographics India Ltd. to support his plea that in the absence of specific provision in the customs law making refunds arising out of finalization of provisional assessment subject to bar of unjust enrichment, such refund cannot be denied under the law. He further states that significantly refunds arising out of finalization provisional assessment under the Excise Law has been subjected to bar of unjust enrichment by a specific amendment whereas no such amendment has been made under the Customs Law.
4. I find that the lower appellate authority has passed a very detailed order while allowing the refund. As regards the decision in the case of Sahakari Khand Udyog Mandal Ltd. (cited supra), its ratio no doubt runs counter to the ratio of the decision in the case of Allied Photographies (cited supra). However, since the decision in the case of Allied Photographies is specific to refund arising out of finalization of provisional assessment and since the same has also been passed by a three Judges Bench of the Hon'ble Supreme Court at an earlier point of time and has not been overruled by a Larger Bench of the said Court, I am of the view that the ratio of the said decision is required to be followed in this case in preference to the ratio of the decision in the case of Sahakari Khand (cited supra). Accordingly, I hold that the bar of unjust enrichment cannot be applied in respect of refunds arising out of finalization of provisional assessment under the Customs Law in the absence of any specific amendment to the law as has been done in the case of refunds arising out of finalization of provisional assessment under the excise law. Consequently, the Revenue appeal is rejected.
(Pronounced in Court)