2007 (5) TMI 124 - AT - Customs

Refund - Department contended that appellant is not entitle for refund claim on the ground that they not fulfill the condition of exemption notification - Held that department contention was not correct and allowed refund to the appellant

Summary

Issues:
1. Refund claim rejection based on failure to challenge assessment order.
2. Compliance with procedure under Customs rules for exemption.
3. Unjust enrichment aspect of the refund claim.

Analysis:
1. The appeal was filed against the rejection of a refund claim for Special Additional Duty (SAD) of Customs paid on imported Low Ash Metallurgical (LAM) Coke. The Commissioner (Appeals) upheld the rejection, citing non-challenge of the assessment order and failure to fulfill exemption conditions. However, the Tribunal found that the claim was lodged before finalizing the provisional assessment, thus challenging the assessment order, contrary to the Commissioner's view. The Tribunal also referenced relevant case laws, including the Priya Blue case, and held that the filing of a refund claim itself constitutes a challenge to the assessment order, supported by previous judgments.

2. Regarding compliance with Customs rules for exemption, the appellant had registered under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, executed a bond, and maintained necessary records. The Tribunal noted that the conditions for SAD exemption were akin to those for Additional Duty of Customs (ADD) exemption, which the appellant had satisfied previously. Therefore, the Tribunal concluded that the appellant had fulfilled the exemption conditions, contrary to the Commissioner's finding.

3. The issue of unjust enrichment was addressed with the submission of a detailed Certificate by an independent Chartered Accountant, confirming that the duty burden was not passed on to others. The Tribunal referenced previous decisions emphasizing the acceptance of such certificates unless strong evidence suggests otherwise. The Tribunal found that the duty burden had not been passed on, as evidenced by the accounts, and ruled that the refund claim was not affected by unjust enrichment.

In conclusion, the Tribunal allowed the appeal, stating that the appellant, having met the relevant notification conditions, was entitled to the refund amount. The claim was deemed not hit by unjust enrichment due to the Chartered Accountant's Certificate. The Tribunal distinguished the Priya Blue case, as the refund claim was filed before finalizing the provisional assessment, granting relief to the appellants.