2001 (12) TMI 746 - AT - Customs

Summary

Issues:
1. Refund claim based on duty paid on raw materials.
2. Rejection of refund claim due to unjust enrichment.
3. Applicability of Chartered Accountant's Certificate as evidence.
4. Interpretation of Bombay High Court's decision in Solar Pesticides case.
5. Reversal of Bombay High Court's decision by the Supreme Court.
6. Need for remand to lower appellate authority for fresh decision.

Analysis:
1. The appeal by the Revenue concerned the refund claim of duty paid on imported raw materials captively used by the respondents. The Commissioner (Appeals) had granted the refund following the Bombay High Court's decision in Solar Pesticides Pvt. Ltd. v. U.O.I.

2. The adjudicating authority initially rejected the refund claim citing unjust enrichment, disregarding the Chartered Accountant's Certificate provided by the assessee. The lower appellate authority overturned this decision without addressing the adequacy of the certificate in proving that the duty incidence was not passed on to customers.

3. The Revenue's appeal was solely based on the belief that the Bombay High Court's decision in Solar Pesticides case was upheld by the Supreme Court. However, the respondent's counsel argued that the Supreme Court had reversed the High Court's decision in U.O.I. v. Solar Pesticides Pvt. Ltd. (2000).

4. Upon review, the Tribunal found that the matter needed to be remanded to the lower appellate authority. The lower authority had not properly assessed the Chartered Accountant's Certificate or considered the Supreme Court's judgment reversing the Bombay High Court's decision.

5. The Tribunal clarified that the Supreme Court's ruling in Solar Pesticides case established the applicability of the bar of unjust enrichment to claims for duty refund on imported goods used captively. The appellant could no longer rely on the Bombay High Court's decision, necessitating a fresh review at the lower appellate level.

6. Consequently, the Tribunal set aside the earlier order and remanded the case to the Commissioner (Appeals) for a detailed reconsideration. The Commissioner was directed to evaluate the sufficiency of the Chartered Accountant's Certificate and provide a reasoned decision after granting the assessee a fair opportunity to present their case.