Commr. of Customs (Port) Vs. India Carbon Ltd. - Court Judgment

Excerpt:
1. revenue came in appeal challenging order passed by commissioner of customs (appeals) vide order-in-appeal no. kol/cus/4/ckp/2003 dated 12.6.2003 setting aside the order-in-original held that refund of levy not realizable is not hit by bar of unjust enrichment.2. the issue before the ld. commissioner (appeals) was whether cess @ rs. 10/- per mt was leviable on imported raw petroleum coke falling under sub-heading no. 2713.11 under the provisions of coal mines (conservation and development) act, 1974 and whether doctrine of unjust enrichment applies for refunding an unrealizable levy. that authority held that cess was collected erroneously on the ground that raw petroleum coke falls outside the purview of the coal mines (conservation and development) act, 1974. and should be refunded and bar of unjust enrichment does not apply.3. ld. dr appearing for the revenue submitted that to get refund respondent has to meet the test of unjust enrichment following judgment of the hon'ble supreme court in the cases of mafatlal industries ltd. v. union of india and ors. reportedsrf ltd. v.asstt. collector of central excise, trichy 4. ld. counsel appearing for the respondent vehemently objected the contention of revenue and pleaded that when levy was paid under error of law, the department can not deprive the respondent from getting back the refund once the levy was unjustly collected. he submitted that while clearing the goods, refund claim of rs. 1,99,414/- was submitted to the customs authorities as early as on 30th march, 1995, relying on section 3 (c) of coal mines (conservation & development) act, 1974. he further submitted that the only grievance of the revenue is that respondent has to undergo test of unjust enrichment and there is no other dispute in the present appeal filed by the revenue. in support of his contention, he relied on the judgments in the cases of (i) land customs, shillong and anr. v. sanawarmal purohit and anr. reported in 1979 elt (j 613), (ii) solar pesticides pvt. ltd. v. union of india , (iii) multimetals ltd. v. assistantcollector of customs v. television & components ltd. 6. the only issue in this appeal is whether refund claim by the respondent has to undergo test of unjust enrichment since revenue came in appeal only on this limited issue against the order passed by ld.commissioner (appeals). the hon'ble supreme court in catena of decisions has already explained the doctrine of unjust enrichment. to cite a few recent judgments are: (i) commr. of central excise, mumbai ii v. allied photographicssahakari khand udyog mandal ltd. v. commr. of central excise and customs & 7. following the ratio laid down in the judicial pronouncements and more particularly on the ratio laid down in union of india v. solar pesticide pvt. ltd. was held that principle of unjust enrichment incorporated in section 27 of the customs act, 1962 would be applicable in respect of the imported raw materials and captively consumed in the manufacture of a final product, we are of the view that the original authority has not properly considered the matter as to whether respondent has recovered the cess amount by any means and passed a reasoned and speaking order on this issue. it would be appreciated that statutory provision specifically incorporate the principle of unjust enrichment. but this does not mean that in absence of statutory provisions, a person can claim and retain undue benefit following the ratio laid down in sahakari khand udyog mandal ltd. v. commr. of central excise & customs (supra).8. in the result, the matter is remanded to the original authority to decide on the limited issue of unjust enrichment affording reasonable opportunity of hearing heard to the respondent.9. cross objection of respondent merely supporting first appeal order is dismissed.

Judgment:
1. Revenue came in appeal challenging order passed by Commissioner of Customs (Appeals) vide Order-in-Appeal No. Kol/Cus/4/CKP/2003 dated 12.6.2003 setting aside the order-in-original held that refund of levy not realizable is not hit by bar of unjust enrichment.

2. The issue before the ld. Commissioner (Appeals) was whether cess @ Rs. 10/- per MT was leviable on imported raw petroleum coke falling under Sub-heading No. 2713.11 under the provisions of Coal Mines (Conservation and Development) Act, 1974 and whether doctrine of unjust enrichment applies for refunding an unrealizable levy. That Authority held that cess was collected erroneously on the ground that raw petroleum coke falls outside the purview of the Coal Mines (Conservation and Development) Act, 1974. and should be refunded and bar of unjust enrichment does not apply.

3. Ld. DR appearing for the Revenue submitted that to get refund Respondent has to meet the test of unjust enrichment following judgment of the Hon'ble Supreme Court in the cases of Mafatlal Industries Ltd. v. Union of India and Ors. ReportedSRF Ltd. v.Asstt. Collector of Central Excise, Trichy 4. Ld. Counsel appearing for the Respondent vehemently objected the contention of Revenue and pleaded that when levy was paid under error of law, the Department can not deprive the Respondent from getting back the refund once the levy was unjustly collected. He submitted that while clearing the goods, refund claim of Rs. 1,99,414/- was submitted to the Customs Authorities as early as on 30th March, 1995, relying on Section 3 (c) of Coal Mines (Conservation & Development) Act, 1974. He further submitted that the only grievance of the Revenue is that Respondent has to undergo test of unjust enrichment and there is no other dispute in the present appeal filed by the Revenue. In support of his contention, he relied on the judgments in the cases of (i) Land Customs, Shillong and Anr. v. Sanawarmal Purohit and Anr. reported in 1979 ELT (J 613), (ii) Solar Pesticides Pvt. Ltd. v. Union of India , (iii) Multimetals Ltd. v. AssistantCollector of Customs v. Television & Components Ltd. 6. The only issue in this appeal is whether refund claim by the Respondent has to undergo test of unjust enrichment since Revenue came in appeal only on this limited issue against the order passed by ld.Commissioner (Appeals). The Hon'ble Supreme Court in catena of decisions has already explained the doctrine of unjust enrichment. To cite a few recent judgments are: (i) Commr. of Central Excise, Mumbai II v. Allied PhotographicsSahakari Khand Udyog Mandal Ltd. v. Commr. of Central Excise and Customs & 7. Following the ratio laid down in the judicial pronouncements and more particularly on the ratio laid down in Union of India v. Solar Pesticide Pvt. Ltd. was held that principle of unjust enrichment incorporated in Section 27 of the Customs Act, 1962 would be applicable in respect of the imported raw materials and captively consumed in the manufacture of a final product, we are of the view that the original authority has not properly considered the matter as to whether Respondent has recovered the cess amount by any means and passed a reasoned and speaking order on this issue. It would be appreciated that statutory provision specifically incorporate the principle of unjust enrichment. But this does not mean that in absence of statutory provisions, a person can claim and retain undue benefit following the ratio laid down in Sahakari Khand Udyog Mandal Ltd. v. Commr. of Central Excise & Customs (supra).

8. In the result, the matter is remanded to the original authority to decide on the limited issue of unjust enrichment affording reasonable opportunity of hearing heard to the Respondent.

9. Cross Objection of Respondent merely supporting first appeal order is dismissed.