2006 (5) TMI 334 - AT - Customs

Summary

Issues Involved:
- Unjust enrichment in customs duty on imported goods claimed by importers who are 100% EOU and have claimed depreciation for Income Tax purposes.

Analysis:
The judgment deals with the issue of unjust enrichment in customs duty on imported goods by importers who are 100% Export-Oriented Units (EOU) and have claimed depreciation for Income Tax purposes. The Revenue challenged the order of the Commissioner of Customs (Appeals) that held the bar of unjust enrichment not applicable to the importers of Cold Storage Plant used for flowers. The lower appellate authority found that being a 100% EOU, the importers would not benefit from claiming depreciation and would not recover the cost of the goods indirectly. The importers' Chartered Accountant certified the return of the depreciation claim, indicating no passing on of duty burden to customers.

In a similar case before the Tribunal, it was held that claiming depreciation under the Income Tax Act does not establish passing on the duty burden to customers. The Tribunal rejected the Revenue's appeal, emphasizing that the burden of extra duty was not passed on, as certified by the importers' Chartered Accountant. The current appeal by the Revenue solely based on the depreciation claim under the Income Tax Act was dismissed, citing the previous Tribunal's decision. The Chartered Accountant confirmed that the depreciation amount was not returned, further supporting the finding that the duty burden was not passed on to customers. Consequently, the Tribunal upheld the lower appellate authority's decision, rejecting the Revenue's appeal on the grounds of unjust enrichment in customs duty.