2009 (6) TMI 703 - AT - Customs

Summary

Issues:
1. Refund of fine and penalty declined on the ground of unjust enrichment.
2. Applicability of unjust enrichment to a claim for refund of fine or penalty.
3. Crediting the amount to the consumer welfare fund.
4. Burden of proof on passing on the incidence of duty.
5. Presumption against passing on personal penalty.
6. Comparison with cited case law and burden of proof.

Analysis:
1. The lower authorities declined the cash refund of Rs. 1,65,000 to the appellant, citing unjust enrichment. The appellant claimed the refund based on a Commissioner (Appeals) order, contending they suffered a significant loss without passing on the duty incidence. The appellant argued against the application of unjust enrichment in this case, referencing Tribunal decisions.

2. The learned DR argued that unjust enrichment applies to refund claims of fine or penalty, citing Supreme Court decisions. The DR presented the company's profit and loss account, indicating the expenses of redemption fine and penalty were likely included in product costing, potentially passing on the duty incidence to buyers.

3. The Tribunal considered the submissions and noted the appellant did not contest the applicability of unjust enrichment to fine or penalty refunds. The appellant resisted crediting the amount to the consumer welfare fund, asserting the excess fine or penalty was not transferred to others. The Tribunal analyzed the profit and loss account, highlighting the expenses and income, suggesting a possibility of passing on some expenses to buyers.

4. The Tribunal emphasized the burden on the appellant to demonstrate that the burden of fine and penalty was not shifted to buyers. Additionally, a presumption against passing on personal penalties to others was noted, as it contradicts criminal jurisprudence principles. The Tribunal reviewed cited case law and found the current case factually distinct, emphasizing the burden of proof on the appellant.

5. Ultimately, the Tribunal upheld the impugned order, dismissing the appeal. The judgment highlighted the burden on the appellant to prove non-passing of fine and penalty burdens, considering the financial records and legal principles. The decision was pronounced in court, concluding the matter.