By TIOL News Service

CHENNAI, FEB 15, 2016: THE appellant contends that while refund of Rs.7,73,000/- was sanctioned, the department opined that unjust enrichment was applicable to the refund consisting differential fine and penalty. The appellant says that the test of unjust enrichment shall only apply to duty and interest but not to differential fine and penalty. Therefore, the authority committed error in law to withhold the refund.

After hearing both sides, the Tribunal held:

++ Perusal of proviso to sub-section (2) of Section 27 of Customs Act, 1962 deals with applicability of test of unjust enrichment to the duty and interest element but not to differential fine or penalty. Therefore, the action of the authority below to deny the refund to the appellant to the extent indicated above on the ground that unjust enrichment shall apply to differential fine and penalty is not the sanction of the law. Accordingly, appeal is allowed.

(See 2016-TIOL-410-CESTAT-MAD)