2017 (2) TMI 1308 - AT - Customs

Refund of duty paid under protest - unjust enrichment - whether the Appellant became successful in satisfying the authorities that the incidence of duty claimed as refund has been borne by them and not passed on to any other person? - Held that - initially the Adjudicating authority after analyzing the evidences on record, sanctioned the refund, observing that the Appellant could satisfy that the burden of duty has not been passed on to any other person. However, on an appeal by the Revenue, the learned Commissioner (Appeals) arrived at an altogether different finding on which was not communicated to the appellant to explain/rebut the same by material particulars. The appellant must be given a fair chance to explain the said objection/finding of the learned Commissioner (Appeals) - appeal allowed by way of remand.

Summary

Issues Involved:
- Refund claim on education cess and higher education cess
- Burden of duty passed on to customers
- Validity of CA certificate and balance sheet as evidence

Refund Claim on Education Cess and Higher Education Cess:
The appellants imported steam coal and filed Bills of Entry, which were provisionally assessed. They were directed to pay education cess and higher education cess on clean energy cess without the benefit of Exemption Notifications. The appellants paid the duty under protest and later filed a refund claim after succeeding in an appeal before the Commissioner (Appeals). The Revenue challenged the refund, leading to the present appeal. The issue revolved around whether the refund amount was correctly claimed and whether it was shown as receivable in the balance sheet for the relevant financial year.

Burden of Duty Passed on to Customers:
The main issue for determination was whether the appellants had borne the burden of duty claimed as a refund and not passed it on to any other person. The appellant presented a CA certificate and the audited balance sheet for the financial year 2011-12, where the refund amount was shown as receivable. However, the Commissioner (Appeals) disregarded this evidence, stating that since the refund amount was not reflected as receivable in the financial year 2010-11 when the duty was paid, it should be treated as an expenditure and considered as a cost of goods, implying that the burden of duty claimed as a refund might have been passed on to customers. The Adjudicating authority initially sanctioned the refund, but the Commissioner (Appeals) arrived at a different finding without giving the appellants an opportunity to explain or rebut the new observation.

Validity of CA Certificate and Balance Sheet as Evidence:
The appellant submitted a CA certificate and the audited balance sheet to support their claim for the refund. The Commissioner (Appeals) disregarded these pieces of evidence, leading to a disagreement on the treatment of the refund amount and the burden of duty claimed as a refund. The Tribunal, after hearing both sides and examining the records, found that the appellant should be given a fair chance to explain the objection raised by the Commissioner (Appeals). Consequently, the appeals were allowed by way of remand to the Commissioner (Appeals) with a direction to provide the appellant with a reasonable opportunity to clarify the position regarding the refund claim and the burden of duty.

This detailed analysis of the judgment highlights the issues surrounding the refund claim, the burden of duty, and the treatment of evidence in the case, providing a comprehensive overview of the legal proceedings and the Tribunal's decision.