2006 (2) TMI 396 - AT - Customs

Refund - Excess payment of duty - taking wrong foreign currency for valuation - Unjust Enrichment - HELD THAT - On persual of S. 154, it is very clear that the clerical or arithmetical mistake could be rectified suo motu which the authorities could have done so when the appellants filed the refund claim. The authorities did not think it fit to invoke the provisions of Section 154. Applying the decision of Division Bench in the case of Goa Shipyard 2005 (8) TMI 277 - CESTAT, MUMBAI . Thus, rejection of the appellant s refund claim is not in connosance with the law. Since the question of unjust enrichment will still apply to the case and as it has been fairly admitted by the learned Advocate for the appellants, that they had not produced certificate of the Chartered Accountant before the lower authorities. Thus, the matter is remanded to the original adjudicating authority for considering the matter afresh after granting the appellant an opportunity of personal hearing and producing evidence that they have not passed on the incidence of duty. Appeal is allowed by way of remand.

Summary

Issues:
Appeal against rejection of refund claim due to excess payment of duty arising from wrong conversion of foreign currency.

Analysis:
1. The appeal was filed against the rejection of the refund claim by the Order-in-Appeal, as the appellant's appeal against the refund claim was dismissed. The dispute arose from the excess payment of duty amounting to Rs. 6,66,468/- due to the wrong declaration of the exchange rate at the time of clearance of imported goods.

2. The appellant contended that the authorities had agreed to the incorrect conversion of foreign currency, leading to the excess duty payment. The appellant sought a refund of the overpaid amount without challenging the original assessment of the Bill of Entry. The appellant cited the Tribunal's decision in a similar case and provided a certificate from a Chartered Accountant stating that the excess duty burden was not passed on to customers, although this certificate was not submitted to the lower authorities.

3. The Departmental Representative argued that the appellant should have promptly notified the customs authorities of the currency conversion error and requested correction at the time of filing the refund claim. The Tribunal noted that the excess duty payment was a result of the erroneous foreign currency valuation and referred to relevant legal provisions regarding correction of clerical errors under Section 154 of the Customs Act, 1962.

4. The Tribunal rejected the contention that a refund claim could not be considered without first appealing against the assessment order. Citing precedents and legal provisions, the Tribunal emphasized the right of the claimant to seek a refund of duty paid in error. The Tribunal highlighted the applicability of Section 154 for correcting clerical errors, which could have been invoked by the authorities when the refund claim was filed.

5. The Tribunal held that the rejection of the refund claim was not in accordance with the law, considering the provisions of Section 154 and the authorities' failure to rectify the clerical error. The matter was remanded to the original adjudicating authority to address the issue of unjust enrichment, as the appellant had not provided the Chartered Accountant's certificate to the lower authorities, despite admitting to its existence.

6. The Tribunal allowed the appeal by way of remand, emphasizing the importance of considering unjust enrichment and granting the appellant an opportunity to present evidence supporting their claim that the duty burden was not passed on to customers.

This detailed analysis of the judgment highlights the legal arguments, precedents, and provisions considered by the Tribunal in addressing the issues raised in the appeal against the rejection of the refund claim.