2007 (2) TMI 76 - AT - Customs

Refund Appellant demanded for refund was in respect of Cenvat credit of AED on the ground that they consumed raw material purchased for the manufacture of excisable goods exported on payment of duty Held refund is admissible

Summary

Issues:
1. Discrepancy in valuation of imported goods leading to imposition of fine and penalty.
2. Refund of duty amount on the grounds of passing on the incidence of duty to the buyer.
3. Interpretation of Chartered Accountant certificates and invoices to determine duty burden passing on.

Analysis:

Issue 1: Discrepancy in valuation and imposition of fine and penalty
The appellants imported goods with a declared value of Rs. 14,79,304/-, which was not accepted by the Original Authority. The value was enhanced to Rs. 31,06,897/-, leading to the imposition of a redemption fine and personal penalty. The Commissioner (Appeals) set aside the order of the lower authority, resulting in a refund claim of Rs. 17,62,044/-. The Asst. Commissioner rejected the refund of duty, citing the burden of proof on the appellants to show the duty incidence was not passed on. The dispute primarily revolved around the discrepancy in Chartered Accountant certificates, leading to the rejection of duty refund.

Issue 2: Refund of duty and passing on the duty burden
The main contention was whether the duty burden was passed on to the buyer. The appellants argued that despite the enhanced value and actual duty paid, the goods were sold at a significant loss, indicating no passing on of duty burden. The Tribunal analyzed the invoices and certificates to determine if the duty incidence was transferred. The lower authority's objection based on the differing certificates was challenged by the appellants, who provided evidence of selling goods below the landed cost, indicating no unjust enrichment and no passing on of duty burden.

Issue 3: Interpretation of Chartered Accountant certificates and invoices
The Tribunal scrutinized the details provided by the appellants, including invoices showing sales to Rajendra Trading Co. at a price lower than the enhanced value and duty paid. The Tribunal noted that the selling price did not cover the enhanced value and duty paid, concluding that the duty burden was not passed on. The Chartered Accountant certificates were considered in light of the documentary evidence presented by the appellants, leading to the decision in favor of the refund claim based on the absence of evidence indicating passing on of duty burden.

In conclusion, the Tribunal allowed the appeal, emphasizing the lack of passing on the duty burden to the buyer based on the evidence presented by the appellants, leading to the entitlement of the refund amount. The discrepancy in the Chartered Accountant's certificates was not deemed sufficient to deny the refund claim, as the invoices and supporting documents indicated a clear case of selling goods below the landed cost, absolving the appellants from unjust enrichment.