2005 (12) TMI 348 - AT - Customs

Summary

Issues:
Refund claim based on incorrect invoice value calculation, application of unjust enrichment principle, burden of proof on appellant to show non-passing of duty incidence to buyer, reliance on CESTAT decisions, interpretation of unjust enrichment in case of capital goods not consumed in manufacturing.

Analysis:
1. The appellants filed a refund claim due to an error in calculating duty based on the invoice value being in US$ instead of Canadian $. The Dy. Commissioner credited the amount to the Consumer Welfare Fund, citing failure to prove non-passing of duty incidence to the buyer. The Commissioner (Appeals) upheld this decision, referring to the Supreme Court's ruling on unjust enrichment applying even in cases of captive consumption. The appellants argued that as they had not sold the imported capital goods, the duty burden was not passed on, entitling them to a refund.

2. The Revenue contended that the appellants did not provide evidence in their books to show recoverability of the claimed amount from customers, as required by Section 28D of the Customs Act. The onus was on the appellants to rebut the presumption of unjust enrichment, which they failed to do according to the Revenue.

3. The Tribunal considered the submissions and noted the certificates from a Chartered Accountant confirming that the imported spare parts were not sold and not used for availing credit towards CVD. Referring to previous decisions, the Tribunal found that the doctrine of unjust enrichment did not apply to capital goods not consumed in manufacturing final products. Relying on CESTAT decisions, the Tribunal concluded that since the goods were not sold and not consumed in the factory, the refund should be granted to the appellants, overturning the previous decision and allowing the appeal with consequential relief.

This detailed analysis of the judgment highlights the key legal issues involved, the arguments presented by both parties, and the Tribunal's reasoning leading to the final decision in favor of the appellant.