Legal principle

Where export cess is paid under a mistaken belief after repeal of the cess law and not rectified by the Revenue, the unjust enrichment clause does not bar refund and non-appeal against the shipping bill assessment is not fatal to the refund claim.

Court decision

The Tribunal allowed the appellant's appeal with consequential relief, holding that the rejection of the refund claim on the ground of unjust enrichment could not be sustained, and that non-challenge to the shipping bill assessment did not bar the refund claim.

Facts

The appellant exported rice vide shipping bill No.6100670 and paid cess under the Agriculture and Processed Food Products Export Cess, 1985 on an FOB value of Rs.6,54,303/- in respect of exports made on or after 01/06/2006, despite the APFPEC Act having been abolished w.e.f. 01/06/2006 by the Cess Laws (Repealing and Amending) Act, 2006. The appellant filed a refund claim for the cess paid. The adjudicating authority, by order dated 31/05/2007, rejected the claim holding that the cess incidence had been passed on to buyers since the full FOB value was realized per bank realization certificates, and credited the refund to the Consumer Welfare Fund under Section 28B read with Section 27(2) of the Customs Act, 1962. The Commissioner(Appeals) upheld the Order-in-Original, leading to the present appeal before the Tribunal.

Key provisions

• Section 27(2), Customs Act, 1962 — Claim of refund duty
• Section 28B, Customs Act, 1962 — Duties collected from the buyer to be deposited with the Central Government