COMMISSIONER OF CUSTOMS Vs. MILLAT FIBERS

JUDGEMENT

(1.) In this appeal under Section 130 of the Customs Act, 1962 (the Act) appellant-revenue has challenged order dated 30th November, 2007 [2009 (233) E.L.T. 254 (Tribunal)] made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following questions stated to be substantial questions of law :-

(2.) The respondent herein at the relevant time was holding a licence of 100% EOU. In connection with alleged illicit clearance of imported Polyester Filament Yarn show cause notice dated 19-9-2002 came to be issued against the respondent. The show cause notice came to be adjudicated vide order-in-original dated 30th October, 2003 whereby, inter alia, demand of customs duty amounting to Rs. 5,34,695/- was confirmed. In appeal, the Commissioner (Appeals) held that the adjudicating authority had no jurisdiction to confirm such a demand and set aside only that part of the order, whereas the order of confiscation under Section 111 of the Act and redemption fine under Section 125(1) of the Act was upheld. As the respondent had already deposited the duty amount, it made an application for refund. Vide order-in-original dated 22nd February, 2005, the claim for refund to the extent of Rs. 2,92,585/- came to be rejected whereas refund of Rs. 2,42,110/- came to be sanctioned. However, it was directed that the sanctioned refund be appropriated against pending dues.

(3.) Later on the adjudicating authority noticed that the doctrine of unjust enrichment was not verified before sanctioning refund of Rs. 2,42,110/-. He, therefore, issued a show cause notice dated 7-6-2005 to the respondent as to why the refund which was sanctioned and erroneously refunded by appropriating the same against Government dues should not be rejected and the appropriated amount should not be recovered under Section 28 read with Section 72 of the Act in absence of any proof of incidence of duty not being passed on. The show cause notice came to be adjudicated vide order dated 15th February, 2006 whereby the adjudicating authority sanctioned refund of Rs. 2,42,110/- and ordered the same to be credited to the Consumer Welfare Fund.