2004 (4) TMI 442 - AT - Customs

Summary

Issues:
1. Refund of excess duty credited to Consumer Welfare Fund.
2. Admissibility of refund under Section 18(2)(a) of the Customs Act, 1962.
3. Applicability of unjust enrichment principle.
4. Verification of cost calculation for duty burden.

Analysis:

1. The issue of the refund of excess duty credited to the Consumer Welfare Fund was raised. The lower authorities had sanctioned the refund but credited it to the Fund. The appellant argued that the refund had arisen from the finalization of provisional duty assessment and should be admissible under Section 18(2)(a) of the Customs Act, 1962.

2. The appellant contended that the refund should be granted without applying the provisions of Section 27(2) of the Customs Act. Reference was made to a Supreme Court decision to support this argument, emphasizing the similarity in language between the Customs Act and the Excise Act. The appellant also asserted that they had not passed on the excess duty burden to buyers or received any subsidy from the government.

3. The Department, represented by the JDR, argued that Section 27(3) of the Customs Act mandated the application of Section 27(2) to all refunds, including those under Section 18. Additionally, it was stated that there was a presumption of passing on the duty burden under Section 28D. The lower authorities had concluded that the higher duty incidence had been offset by a government subsidy to the appellants.

4. After considering the arguments and case law cited by both sides, the Tribunal found that the appellants had demonstrated that they had not passed on the duty burden to buyers nor received a subsidy to compensate for the extra duty burden. The Tribunal did not delve into the question of the unjust enrichment principle's applicability to customs refunds resulting from the finalization of provisional assessments. The matter was remanded to the original authority for verification of the cost calculation submitted by the appellants, and the refund was to be sanctioned and paid accordingly.

In conclusion, the Tribunal allowed the appeal based on the findings regarding the duty burden and the need for verification of cost calculations before refunding the excess duty amount to the appellants.