Oriental Exports Vs. Commissioner of Customs

1. Arguing for the appellant, Shri Devnath submitted that the short point to be considered in this case is whether doctrine of unjust enrichment is applicable to provisional assessment in terms of Section 18 of the Customs Act. He submitted that the doctrine of unjust enrichment is not applicable to provisional assessment in terms of Section 18 of the Customs Act which is similar to Rule 9B of the Central Excise Rules. In support of his contention he relied upon the following decisions: -M/s. Smithkline Beecham Ltd. v. CCE, Hyderabad (Final Order No. 852/99 -C, dated 16-9-99)C.C.E., Meerut v. Steel and Metal Tubes (I) Ltd. - 2000 (126) E.L.T. 1201 (T) (Final Order No. 7/2000-A dated 13-1-2000) (vi) M/s. GKN Invel Transmissions Ltd. v. CC, New Delhi (Final Order No. 694/2000-A dated 30-8-2000)M/s. Star Paper Mills Ltd. v. CCE, Meerut - 2000 (121) E.L.T. 164Kinetic Motors Co. Ltd. v. CCE 2. On the other hand Shri Jain appearing for the Revenue submitted that para 95 of the Mafatlal Industries (Supra) is in conflict with the para 99/100 of the said decision. Furthermore the facts of this case is covered by the second portion of the para 95. In this connection he read the relevant para 95 of the Mafatlal Industries: "95. Rule 9-B provides for provisional assessment in situations specified in Clauses (a), (b) and (c) of Sub-rule (1). The goods provisionally assessed under Sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules. The duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally 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 9-B will not be governed by Section 11-A or Section 11-B, 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 entertained and is allowed/decreed, then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B(5) re-agitating the issues already decided under Rule 9-B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation." 3. He also drew our attention to the finding portion of the Commissioner (Appeals) as appeared in internal page 3 of the said order is as follows :- "The facts of this present case, as adduced hereinabove, are copiously clear to depict that the 'Assessing Officer', who finalised the provisional assessment in terms of Section 18, did not allow the refund to the appellants. Consequent upon the finalisation of assessment, the appellants felt that they were entitled to refund and therefore, filed 11 separate and independent refund claims to re-agitate the issue which had already been decided under Section 18. I, thus, find that the appellants case is covered by the finding of the Hon'ble Supreme Court adduced against (iii) above. In the face of the facts as those stand now, I, therefore, hold that the refund claims of the appellants, in question, are to be governed by the provisions of Section 27 and not by Section 18. Pressing this plea further, the appellants have contended that in the case of Needle Industries India Ltd. v. CCE 1998 (101) E.L.T. 286 (T) the Tribunal allowed the refund in similar case without applying the clause of unjust enrichment. On an examination of that order of Hon'ble Tribunal, I find that M/s. Needle Industries had not re-agitated the issue, decided under Rule 9B (5), by filing any independent refund claim. The facts of that case are, thus, clearly distinguishable." 4. We have carefully considered the submissions made by both sides. It was brought to our notice that in the similar circumstances the Tribunal has already taken the view that doctrine of unjust enrichment is not applicable to provisional assessment in terms of Section 18 of the Customs Act which is similar to Rule 9B of the Central Excise Rules.

5. In para 3 of the Final Order No. 694/2000-A dated 30-8-2000 it was observed that with reference to Section 18, from the provision, it is clear that the authority, while finalising the assessment, should have ordered refund of the excess amount paid by the assessee. Since such a procedure was not resorted to by the adjudicating authority while finalising the assessment, applications were made.

6. In the facts and circumstances following the ratio of the aforesaid decision and in view of the observations made by the Supreme Court in the case of Mafatlal Industries we are of the view that unjust enrichment is not applicable to the provisional assessment in terms of Section 18 of the Customs Act. Accordingly appeal is allowed.