Legal principle

Excess duty paid on provisional assessment, being a payment based on estimate (a deposit or notional amount rather than duty), is refundable on final assessment and the doctrine of unjust enrichment under Sections 27 and 28D of the Customs Act, 1962 does not apply to it.

Court decision

The Tribunal (Anil Choudhary, Member (Judicial)) dismissed the Revenue's appeal, holding there was no merit in it, thereby upholding the refund of the excess duty paid on provisional assessment to the respondent shipping company.

Facts

The respondent shipping company converted a foreign-going vessel to coastal run, and its Bill of Entry was assessed provisionally on 06.02.2009 and finally on 19.08.2009. Provisional customs duty was paid on the estimated quantity of bunker fuel to be consumed during the coastal run by the shipping agent on behalf of the company. On completion of final assessment, a refund claim was filed as duty had been paid in excess on provisional assessment. The Assistant Commissioner sanctioned the refund holding unjust enrichment was not attracted since the goods were used captively, and the Commissioner (Appeals) upheld the refund relying on Board Circular No. 58/97 dated 06.11.1997 and the Tribunal's ruling in CC, Kandla v. Ambica Maritime Ltd. The Revenue then appealed to the Tribunal.

Key provisions

• Section 28D, Customs Act, 1962 — Presumption that incidence of duty has been passed on to the buyer
• Section 27, Customs Act, 1962 — Claim of refund duty