Commissioner of Customs vs Mahalaxmi Exports

K.A. Puj, J.—The Commissioner of Customs has filed this tax appeal u/s 130 of the Customs Act, 1962 proposing to formulate the following substantial questions of law for the determination and consideration of this Court:

Whether in the facts and circumstances of the case, the Tribunal is justified in holding that the amount deposited by the Respondent during the pendency of the proceedings cannot be treated as duty leviable under the Act?

Whether, in the facts and circumstances of the case, the Tribunal has erred in law in not applying the doctrine of Unjust Enrichment made during the investigation and pending adjudication proceedings?

Heard Mr. Dhaval Shah, learned advocate appearing for the Respondent and perused the appeal memo as well as the orders passed by the CESTAT.

While allowing the appeal of the Respondent, the Tribunal observed in its order 2009 (233) E.L.T. 105 (Tri. - Ahmd.) that the only issue involved in this case is regarding amount deposited by the Respondent during the course of investigation before the authorities. The show-cause notice was issued to the Respondent u/s 28 of the Customs Act for the goods which were alleged to have been clandestinely cleared by the Respondent-assessee. During the pendency of the investigation, the Respondent deposited the entire amount with the authorities. The adjudicating authority confirmed the demand u/s 28 and also imposed penalty. The Respondent-assessee preferred an appeal before the first Appellate Authority who held that confirmation of demand of duty u/s 28 is not correct and set aside the same. After confirmation of demand has been set aside by the Commissioner (Appeals), the Respondent preferred an application for refund of the amount deposited by him with the authorities during the course of investigation. The Adjudicating Authority rejected the refund on the ground of unjust enrichment. On an appeal, the Commissioner (Appeals) held in favour of the Respondent after following the judgment of the Tribunal in the case of Jayant Glass Industries v. Commissioner of Central Excise 2002 (5) RLT 98 (T). Before the Tribunal, a specific query was raised and in reply to that query, the learned departmental representative was not in a position to confirm as to whether revenue has preferred any appeal against the order of setting aside the confirmed demand. The Tribunal, therefore, took the view that in absence of any appeal, the amount which has been deposited by the Respondent, cannot be considered as duty and the findings arrived at by the learned Commissioner (Appeals) are correct and does not require any interference.

Since the amount paid by the Respondent during the course of investigation was treated as deposit and that finding was not further challenged by the department, principles of unjust enrichment cannot be applied in such a situation. Since the Tribunal has arrived on this finding after considering the facts of the case and issue was finalised and no further appeal was preferred by the department against the order of the Commissioner (Appeals), we are of the view that no substantial questions of lawarises out of the order of the Tribunal.

This appeal is, therefore, summarily dismissed.