2015 (6) TMI 1107 - AT - Customs

Valuation - Spandex yarn imported in the year 2005 - enhancement in value - rejection of declared value purely on the grounds that the importer did not produce any evidence - Held that - the Appellate Authority has discussed the issue in detail and after examining the documents and L.C concluded that the declared price is correct and is to be taken as the transaction value and also clearly brought out that the same importer s similar consignment has been accepted by the department and also compared with the quantity of the yarn imported in the present consignment and compared to the quantity of the goods relied by the Revenue - the declared price be accepted as the transaction value - appeal of revenue dismissed. Refund claim - unjust enrichment - Held that - the appellant has been able to establish that the duty incidence has not been passed on to the customers and their claim is not hit by the bar of unjust enrichment. The appellant has produced all the relevant documents i.e. C.A. Certificate balance sheet challans but the same were not considered - On perusal of the balance sheet for the financial year ending 31-3-2006 we find that during the relevant period the excess duty paid by the appellant has been absorbed by them and shown by them as receivables from the department which is duly supported by the Chartered Accountant s Certificate dated 19-12-2005 - the appellant has not passed on the enhanced duty and it is a fact that the spandex yarn was consumed in their factory for manufacture of final product - the appellant is entitled for the consequential refund arising out of the Order-in-Appeal dated 30-9-2005 and the refund is not hit by unjust enrichment - decided in favor of assessee. Appeal disposed off - decided in favor of assessee.

Summary

Issues:
1. Valuation of imported goods - Enhancement of value
2. Refund claim rejection and unjust enrichment

Analysis:

Issue 1: Valuation of imported goods - Enhancement of value
The case involved the appellant importing spandex yarn at declared invoice prices, which were later enhanced by the authorities. The Assistant Commissioner rejected the declared value and confirmed the enhanced value under Rule 8 of Customs Valuation Rules, 1988. The Commissioner of Customs (Appeals) set aside the Assistant Commissioner's order, leading to a refund claim by the appellant. The Revenue appealed against the Commissioner's decision, arguing that the enhancement of value was justified under Rule 4(2)(b) and Rule 8 of the Customs Valuation Rules. However, the Tribunal found that the declared price should be accepted as the transaction value based on detailed examination and comparison of documents, ruling in favor of the appellant.

Issue 2: Refund claim rejection and unjust enrichment
The appellant sought a refund of the additional duty paid due to the enhanced value of imported goods. The Assistant Commissioner initially sanctioned the refund but credited it to the Consumer Welfare Fund citing unjust enrichment. The Commissioner of Customs (Appeals) upheld this decision, prompting the appellant to appeal. The Tribunal reviewed the documents provided by the appellant, including a Chartered Accountant's Certificate and balance sheet, which demonstrated that the duty incidence had not been passed on to customers. The Tribunal concluded that the appellant was entitled to the refund as the duty had been absorbed by them and not realized from buyers. Relying on relevant case laws, the Tribunal set aside the order crediting the refund amount to the Consumer Welfare Fund, allowing the appellant's claim for the refund.

In conclusion, the Tribunal upheld the Order-in-Appeal regarding the valuation of imported goods and rejected the Revenue's appeal. Additionally, the Tribunal set aside the Order-in-Appeal that credited the refund amount to the Consumer Welfare Fund, ruling in favor of the appellant's entitlement to the refund without unjust enrichment.