2007 (2) TMI 48 - AT - Customs

Refund claim Appellants produce evidence in support that he doesn t pass the excess duty to any person Authority was not satisfied with the evidence adduced by appellant and according dismiss the appeal.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appeal was filed against the rejection of a refund claim by the lower authorities on the grounds of unjust enrichment. The appellants imported certain machines under Customs Notification No. 36/96 but were not granted the benefit during assessment, resulting in higher duty payment. The original authority allowed the refund claim, but the amount was credited to the Consumer Welfare Fund due to lack of evidence against unjust enrichment. The appellants produced an affidavit from the company's Chairman and a certificate from their Chartered Accountant to demonstrate that the excess duty burden was not passed on to any other person. However, the first appellate authority was not satisfied with the evidence provided, as it lacked invoices showing the price and duty separately. The appeal against the Assistant Commissioner's order was rejected, leading to the present appeal.

Upon examining the records and submissions, it was noted that the Chartered Accountant consistently showed the refund claim amount in the company's accounts, indicating that the excess duty burden was not transferred to the buyers. The appellants argued that similar cases had been granted cash refunds based on Chartered Accountant's certificates, citing relevant case laws. However, the opposing view referred to Sections 27, 28C, and 28D of the Customs Act, stating that the burden lies on the refund claimant to prove that the duty incidence was not passed on to the buyers, which cannot be solely established by a Chartered Accountant's certificate.

Section 28C of the Customs Act mandates that the price in sales invoices includes the duty paid, while Section 28D presumes that duty paid is passed on to the buyer unless proven otherwise. The burden of proof rests on the importer to show the absence of unjust enrichment for cash refund eligibility. The Tribunal emphasized that a Chartered Accountant's certificate alone is insufficient to rebut the presumption of unjust enrichment, as invoices play a crucial role in determining the duty burden transfer. The lack of evidence indicating a separate duty amount in the invoices led to the conclusion that the duty burden was assumed by the buyers, as the Chartered Accountant's certificate and the Chairman's affidavit were not considered conclusive evidence against unjust enrichment.

In light of the above analysis, the Tribunal upheld the impugned order and dismissed the appeal, emphasizing the significance of concrete evidence, such as detailed invoices, in proving the absence of unjust enrichment for refund claims under the Customs Act.