CA Bimal Jain
Ispat Industries Ltd. (the Appellant) is an importer of bulk quantity of iron ore pellets, coke and other raw material through the Dharamtar port. Due to inadequate draft at times, the mother vessel is unable to reach the jetty and has to discharge cargo at Bombay Floating Light, from where daughter vessel carried the cargo upto the jetty at Dharamtar. Therefore, an issue crop up that whether the expenses incurred for carrying the goods discharged at Bombay Floating Light to Dharamtar jetty through barge/daughter vessel (Barge charges) were includible in the assessable value for the purpose of calculating Customs duty, being cost of transportation.
The Hon’ble Tribunal held that Barge charges are not includible in the assessable value of the imported goods. Being aggrieved the Revenue preferred an appeal before the Hon’ble Apex Court. Apposite to mention that, during the pendency of the appeal, the Appellant was compelled to pay duty on Barge charges and the Appellant paid the same under protest.
The Hon’ble Supreme Court held that the Barge charges were not includible in the assessable value of imported goods and the amount collected by Revenue as Barge charges needs to be refunded along with interest.
Being aggrieved, the Revenue filed a review petition which was dismissed and also filed a curative petition which was also dismissed.
Based on the Hon’ble Apex Court decision, the Appellant filed refund claim of the amounts paid towards Customs duty on barge and stevedoring charges which was sought to be denied by issuance of the SCN. The Appellant in reply to the SCN interalia submits that as the refund claim pertains to the period from 1994-95 to 2005-06 therefore, the provisions of bar of unjust enrichment are not applicable for the period prior to July 13, 2006. The Asst. Commissioner sanctioned the refund claims along with interest (“Order 1”). Order 1 was reviewed and an appeal was filed before the Commissioner (Appeals) on the various grounds apart from the issue of unjust enrichment. The Hon’ble Commissioner (A) allowed the appeal in favour of the Revenue. Being aggrieved the Appellant preferred an appeal before the Hon’ble Tribunal.
The Hon’ble CESTAT, Mumbai allowed the appeal by Majority Order being passed in favour of the Revenue. The Hon’ble Tribunal held that refund amount must be shown as receivable to satisfy the Bar of Unjust Enrichment .
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)