2015 (1) TMI 67 - AT - Customs

Denial of refund claim - Unjust enrichment - excess payment of safeguard duty - Held that - the argument of ld. A.R. that bar of unjust enrichment is applicable to the facts of the case is sustainable. - the appellant has been able to prove that the amount is recoverable from the customs and he is able to produce the Chartered Accountant certificate certifying that the amount of excess safeguard duty has not been formed the part of selling price of the goods. Therefore, the appellant has proved that the burden of duty is not passed on the buyer and the bar of unjust enrichment is not applicable to the case. - refund allowed - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant imported aluminum foils with a duty initially at 35% safeguard duty, later reduced to 30%. The refund claim for the excess 5% duty was allowed by the Adjudicating Authority but rejected on appeal by the revenue. The rejection was due to the lack of evidence that the duty incidence was not passed on to the buyer. The appellant argued that in safeguard duty cases, the bar of unjust enrichment does not apply. The Adjudicating Authority noted that the duty burden had not been passed on to the buyer based on the Chartered Accountant certificate provided. The appellant also produced extracts from the books of accounts supporting the non-passing of duty burden. The Adjudicating Authority set aside the rejection, stating that the appellant had proven the duty burden was not passed on, thus unjust enrichment did not apply.

The ld. AR contended that the Chartered Accountant certificate did not conclusively show that the duty burden was not passed on to the buyer, and the appellant failed to provide the balance sheet for verification. However, the appellant argued that as the refund claim was sanctioned within the same year, showing the amount receivable in the balance sheet was unnecessary. The appellant also emphasized that the Adjudicating Authority had acknowledged the non-passing of duty burden based on the evidence provided. The Adjudicating Authority's findings were supported by the appellant's submission of extracts from the company's books of accounts, certifying that the safeguard duty amount had not been included in the selling price of the goods. The appellant's argument that the bar of unjust enrichment did not apply to safeguard duty cases was accepted, and it was established that the duty burden had not been transferred to the buyer. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief.