The kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) has held that a refund claim in terms of customs notification cannot be rejected due to non-filing of certificate of origin at the time of bills of entry and ruled that bar of Unjust Enrichment not applicable.
M/s Graphite India Limited, the respondent is a manufacturer of Graphite Electrodes. During the ordinary course of business, the respondent imported some material/goods from the suppliers of Japan. The respondent is eligible for exemption in duty payment against the materials. They import from Japan upon presentation of the Country of Origin Certificate to the Customs Authorities under Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules, 2011, implemented by Notification No.55/2011-Cus (NT) dated 01.08.2011.
The respondent filed 27 Bills of Entry during the period 14.05.2018 to 27.05.2019 for the clearance of the said goods. The respondent paid the Basic Customs Duty at the rate applicable and the goods were allowed to be cleared for home consumption. Thereafter, the respondent filed 3 refund claims dated 10.05.2019, 21.11.2019 & 23.05.2020. The Country of Origin Certificate has been issued retroactively in terms of Notification No.55/2011-Cus (NT) dated 01.08.2011.
The refund claims were entertained by the Adjudicating Authority, who held that the bar of unjust enrichment does not apply to the facts. The Certificate of Country of Origin is found in order, but rejected the refund claims based on the judgment of the Apex Court in the case of ITC Limited Vs, Commissioner of Central Excise, Kolkata holding that without challenge/modifying the assessment of Bills of Entry, the refund is not entertainable.
On appeal, the Commissioner (Appeals), remanded back the matter to the adjudicating authority for reconsideration of refund claims on the strength of the Certificate of Country of Origin issued retroactively since the overseas suppliers from Japan were not able to provide the Certificate of Country of Origin at the time of presenting the Bills of Entry.
In remand proceedings, the adjudicating authority again rejected the refund claims on the grounds of unjust enrichment. The respondent again challenged the order before the Commissioner (Appeals), who held that the adjudicating authority should have allowed the refund claims and in this case, the refund claim was filed from the strength of the Certificate of Country of Origin issued retroactively. Therefore, the Bills of Entry are to be amended under Section 149 of the Customs Act, 1962. The Customs authorities again remanded the matter to the adjudicating authority for denovo adjudication for reconsideration of refund claims.
The revenue submitted that the Commissioner (Appeals) has not considered the issue of bar of unjust enrichment and he remanded back the matter to the adjudicating authority for reconsideration of the refund claim filed by the respondent.
On the other hand, the Counsel for the respondent submitted that the respondent has filed the refund claims in terms of Notification No.55/2011-Cus (NT) dated 01.08.2011 and at the time of filing of Bills of Entry, the respondent did not have Certificate of Country Origin. Therefore, the question of amendment of Bills of Entry does not arise.
A two-member bench comprising of Mr Ashok Jindal, Member (Judicial) and Mr Rajeev Tandon, Member (Technical) observed that the respondent is a manufacturer and using the imported goods to manufacture the final product, which is exported, in that circumstances, the question of bar of unjust enrichment does not arise.
Further held that the respondent has passed the bar of unjust enrichment in the facts and circumstances of the case and directed the adjudicating authority to do the needful per law within 60 days. The Revenue is dismissed and the Cross Objection is allowed with consequential relief, if any.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
