2008 (6) TMI 473 - AT - Customs

Summary

Issues involved: Appeal against disallowance of refund on the ground of duty incidence passed on, interpretation of Customs Act provisions u/s 28C and 28D, unjust enrichment, reliance on Chartered Accountant certificate, applicability of previous Tribunal decisions.

Summary:

Issue 1: Disallowance of refund on the ground of duty incidence passed on
The appellants appealed against the disallowance of a refund amount of Rs. 4,12,376/-, claiming that the duty incidence had not been passed on to the buyers. They argued that the goods were sold at a loss, supported by a Chartered Accountant certificate showing the amount in dispute as outstanding in their books of accounts. The appellants relied on previous Tribunal decisions to support their claim that when goods are sold at a loss, the burden of duty has not been passed on. However, the Revenue contended that as per Section 28D of the Customs Act, the burden is on the appellants to prove that duty incidence has not been passed on.

Issue 2: Interpretation of Customs Act provisions u/s 28C and 28D
The Revenue argued that Section 28D of the Customs Act presumes that the full incidence of duty has been passed on to the buyer unless proven otherwise by the person who paid the duty. They also referred to Section 28C, which requires the duty amount to be prominently indicated in all relevant documents. The Chartered Accountant certificate presented by the appellants indicated that the burden of duty had not been passed on, but the Revenue contended that the appellants failed to adequately prove this, leading to the rejection of the refund claim.

Issue 3: Unjust enrichment and reliance on previous Tribunal decisions
The Tribunal found that the refund claim was rejected on the grounds of unjust enrichment. Despite the appellants' argument that the goods were sold at a loss, the Tribunal noted that the loss shown was less than the refund amount claimed. The Chartered Accountant certificate only indicated that the burden of duty did not appear to have been passed on. The Tribunal also highlighted that the appellants failed to demonstrate in other consignments how they had not suffered a loss, as required by Section 28 of the Customs Act. Ultimately, the Tribunal dismissed the appeal as the appellants did not meet the burden of proving that the duty incidence had not been passed on.

This judgment emphasizes the importance of providing sufficient evidence to demonstrate that the burden of duty has not been passed on, as per the provisions of the Customs Act.