Per T.K. Jayaraman :

This appeal has been filed against Order-in-Appeal No. 648/2006-Cus. dated 1.1.2007 passed by the Commissioner of Customs (A), Cochin.

2. I heard both sides.

3. The learned advocate stated that the appellants imported newsprint. As the first test of the department revealed that the goods were other than newsprint, under protest the appellants discharged the duty liability. However on retest, it was revealed that the goods were indeed newsprint as claimed by the appellants. In view of this fact, the appellants filed refund claim on the higher duty paid. The lower authority rejected the refund claim on the ground that the assessment had not been challenged by the appellants. While rejecting the claim, the ratio of the decision in the Priya Blue Industries Ltd. Vs. CC (Prev.) reported in 2004 (64) RLT 321 (SC)=2004 (172) ELT 145 (SC) was applied.

3.1 The learned advocate pointed out that it is not correct to say that the appellants had not challenged the assessment, even when the first test result against them, they paid the duty only under protest and also asked for retest. If this is not challenging the assessment, then what else is it? He further invited to the judgment of the decision of Chennai Bench rendered in the case of Styleman Vs. CC, Chennai as reported in 2006 (75) RLT 907 (CESTAT-Che.)=2006 (198) ELT 559 (Tri.-Chennai) wherein in an identical circumstance, the Tribunal allowed the refund.

4. The learned departmental representative stated that the issue relating to unjust enrichment had not been examined. He also reiterated the decisions of the lower authorities.

5. On a very careful consideration of the issue, I find that the ratio of the Priya Blue case cannot be blindly applied considering the facts of this case. The appellants imported newsprint. The retest of the samples revealed that the goods were newsprint only. Hence, there was no mis-declaration and no violation of any customs law. The appellant was not at all at fault with regard to the impugned imports. As the department insisted for higher duty, the appellants had to discharge the higher duty liability under protest. All these facts show that right from the beginning the appellants resisted the stand of the department. This is actually a challenge to the assessment carried out by the department. Hence, rejection of the refund claim on the ground that the assessment order was not challenged is not at all correct. An identical situation was examined in the decision of Chennai Bench cited supra. In my view, the appellant is rightly entitled for the refund of the higher duty already paid. However, before granting the refund, the unjust enrichment aspect has to be carefully examined in accordance with law. Hence, while holding that the appellant is entitled for refund, I have no other option but to remand the matter to the Original Authority to examine the aspect of unjust enrichment and pass a suitable order within a period of three months from the date of receipt of this order.