Jurispruden tiol - Recent SC Judgement

By Vijay Kumar

Customs - Refund of deposit (not towards duty) - No unjust enrichment - Department ordered to refund amount with interest of 13%:

Here is an interesting case. A and B imported alcohol and sold it to C. The Department felt that A and B had undervalued the goods and so booked cases against them. By that time the goods were with C. Customs seized the goods from C. C was not an importer and no way concerned with the import or alleged undervaluation. Even then his goods were seized. The High Court ordered release of the goods subject to a deposit of Rs. 1.56 crors.

In the CESTAT the undervaluation was not proved and A and B were absolved of the charges. Therefore C sought refund of the 1.65 crores deposited by him. The Department shouted, "UNJUST ENRICHMENT"and rejected the refund claim. Strangely the High Court upheld the unjust enrichment plea and so C is in the Supreme Court.

The Supreme Court noted that the appellant had not imported the goods in question. In the adjudication proceedings, while imposing the duty against the importers, a categorical finding was also recorded at the same time that the appellant had no role to play therein and was a bona fide purchaser of the goods from the importer. It is also manifest that the appellant came into picture only when the goods purchased by the appellant were seized by the custom department and he had to approach the High Court of Bombay for the release of those goods. What is significant is that as a condition for the release of the said goods, interim order directing the appellant to deposit the amount in the sum of Rs.1,56,64,500 was passed. It was not towards any custom duty. In this scenario, it is difficult to hold that the principle of unjust enrichment can at all be applied. Since the amount in question was deposited in compliance with the interim order passed by the High Court of Bombay, which was not towards duty, the question of unjust enrichment would not arise at all.

The Court ordered that the entire amount shall be refunded along with interest calculated at the rate of 13 per cent per annum.

Perhaps this is the best investment ever made by the petitioner -13 per cent interest for 20 years!

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