2007 (5) TMI 506 - AT - Customs

Refund - Time Limitation - Unjust enrichment - Held that - the appellants have demonstrated that they have borne extra duty burden themselves and have not passed on the same to their buyers - in view of the fact that the invoice clearly states that CV duty was not charged, there is no scope for the buyers to avail of the Modvat credit and hence insisting on a Certificate from the Central Excise authorities particularly when the buyers are traders, does not appear necessary for settling the refund claim - appellants are entitled to refund claim - appeal allowed.

Summary

Issues:
Claim of refund of CV duty paid under protest for Reprocessed LDPE Agglomerates in Domestic Tariff Area.

Analysis:
The appellants contended that they should not pay CV duty for the impugned goods, Reprocessed LDPE Agglomerates, cleared in the Domestic Tariff Area. However, the Department disagreed, leading the appellants to pay the duty under protest for the relevant period.

The consultant for the appellants argued that although CV duty was paid under protest to the department, it was not charged from the customer who were traders and not registered dealers. The department's stance on the levy of CV duty, based on a Board's Circular, was rejected by the Hon'ble High Court of Calcutta, and subsequently, the appellants filed a refund claim. The department's Special Leave Petition (SLP) against the High Court's decision was also dismissed by the Hon'ble Supreme Court.

The lower authority rejected the refund claim citing reasons such as limitation, failure to prove that the extra duty burden was not passed on, and absence of a Certificate from the Central Excise authorities confirming that buyers did not take Modvat credit for the goods sold by the appellants.

Upon hearing both sides, it was found that the appellants paid the duty under protest and filed the refund claim within the prescribed one-year period after the High Court's decision. They provided a Certificate from a Chartered Accountant stating that the extra duty burden was not passed on and was reflected in the appellants' balance sheet. This certification, along with the invoice not charging CV duty, indicated that buyers could not avail of Modvat credit. Therefore, the requirement for a Certificate from Central Excise authorities, especially when buyers were traders, was deemed unnecessary for the refund claim settlement.

Consequently, the Tribunal set aside the impugned order and ruled in favor of the appellants, allowing the refund claimed following the High Court's decision. The appeal was allowed, granting consequential relief to the appellants.