Doctrine of unjust enrichment applies to pre-deposit amount & can be substantiated by CA certificate

Doctrine of unjust enrichment would apply to the pre-deposit amount but same can be substantiated by support of CA certificate that incidence of duty has not been passed on

Certain goods belonging to Siddhi Vinayak Steel (the Appellant) and lying at Shreenath Warehouse were seized when the SIIB found that certain goods were illegally imported through Chennai port under DEEC license for local market in Mumbai. The Appellant challenged the seizure of the goods by filing a writ petition before the Hon’ble High Court of Bombay. The Hon’ble High Court directed the Appellant to pre-deposit Rs 12 Lakhs and further directed the Department to issue a Show Cause Notice. Accordingly Show Cause Notice was issued and the Commissioner (Import) while adjudicating the case, ordered confiscation of the goods under Section 111(d) of the Customs Act, 1962 (the Customs Act), imposed redemption fine of Rs. 2,15,000/-,duty of Rs. 13,17,733/- along with penalty of Rs. 1 lakh.

The Appellant aggrieved by the order of the Commissioner (Import) filed an appeal before the Hon’ble CESTAT, Mumbai on ground of jurisdiction, which was allowed. Thereafter, the Department challenged the same, before the Hon’ble High Court of Bombay where also contentions of the Department were rejected.

Subsequently, the Appellant filed refund claim of pre-deposit amount, which was sanctioned by the lower Adjudicating Authority, but credited the same to Consumer Welfare Fund in terms of Section 27(2) of the Customs Act on the ground that the Appellant had failed to discharge the onus that incidence of duty has not been passed on.

Being aggrieved, the Appellant preferred an appeal before the Commissioner (Appeals) who upheld the order of lower Adjudicating Authority. Thereafter, the Appellant preferred an Appeal before the Hon’ble CESTAT, Mumbai.

The Hon’ble CESTAT, Mumbai relying upon the decisions made in case of UOI Vs. Jain Spinners Ltd [1992 (61) E.L.T. 321 (S.C.)]and Pride Foramer Vs. CC [2006 (200) E.L.T. 259 = 2008 (12) S.T.R. 657.] held that doctrine of unjust enrichment would be applicable in the case of pre-deposited amount. It was further held that since, in the instant case the amount of pre-deposit was shown as receivable in the balance sheet of the Appellant and the same has been substantiated by Chartered Accountant certificate dated November 24, 2006 which has not been challenged by the Department, unjust enrichment could not be alleged.