2014 (10) TMI 798 - AT - Customs

Denial of refund claim - Unjust enrichment - Held that - Appellants have submitted before Commissioner (Appeals) the balance sheets for the relevant period, wherein the said excess payment of duty was reflected as advance payment/credit . The said fact was also confirmed by Shri R.S. Malhotra, General Manager of the appellants. The appellants also took a stand that they debited the account of clearing agent inasmuch as it was his mistake. They further clarified that they have withheld the payment of CHA and the said amount would be given to the CHA only on receipt of the same from Revenue - appellants have placed on record sufficient evidence to reflect that the amount has been mentioned in the balance sheet as recoverable and the payments of the CHA has also been withheld meaning thereby that the excess duty paid by them stands adjusted against the payments of the CHA for the time being. All these facts are sufficient to establish that the excess payment was not passed on to the buyer. Accordingly, I set aside the impugned order with the consequential relief to the appellant - Decided in favour of assessee.

Summary

Issues:
1. Dispute regarding the incorrect reflection of invoices in bills of entries.
2. Claim for refund of excess duty paid.
3. Unjust and undue enrichment aspect.
4. Evidence submitted by the appellants to establish non-passing of excess payment to the buyer.

Analysis:
1. The dispute in the present appeal revolved around the incorrect reflection of the value of imported goods in bills of entries. The appellants imported heavy engineering items, with the value in Euros on the bills of entries contradicting the invoices in US $. The discrepancy was attributed to an inadvertent error by the Clearing House Agent (CHA).

2. The excess payment of duty amounting to &8377; 1,24,685/- due to the wrong reflection of invoices led the appellants to seek a refund. Initially denied on the basis of non-challenge of the bill of entry, the matter was remanded by the Commissioner (Appeals) to verify unjust and undue enrichment. Both authorities subsequently rejected the refund claim on these grounds.

3. Upon reviewing the Commissioner (Appeals) order, it was observed that the appellants had presented balance sheets for the relevant period, showing the excess duty payment as an "advance payment/credit." The General Manager of the appellants confirmed this fact. The appellants clarified that they debited the clearing agent's account for his mistake and withheld payment to the CHA until reimbursement from Revenue, ensuring the amount was not passed on to the buyer.

4. The appellants provided substantial evidence, including the balance sheet reflecting the recoverable amount and withholding of CHA payments, indicating that the excess duty payment was not transferred to the buyer. These facts established that the appellants had not benefited unjustly or unduly from the excess payment, leading to the setting aside of the impugned order and granting consequential relief to the appellant.