2015 (1) TMI 573 - HC - Customs

Refund of 4% of Special Additional Duty (ADC/SAD) - assessee filed refund in terms of Notification No.102/2007 department rejected the claim on the ground that assessee failed to prove that they had not passed on the incidence of duty to the customers or any other person and also they have not furnished the required documents in relation to refund claims - held that - In the Tribunal s order, it is observed that there is no dispute that all the conditions in terms of the Notification have been fulfilled excepting the unjust enrichment aspect which has been as submitted by the learned Counsel, prescribed by the Board . Therefore, it is not open to the learned Counsel for the Revenue to contend that before this Court though the terms of the notification has not been complied with but the same has been considered and the point that was argued before the tribunal is only to prove unjust enrichment aspect. Section 28D of the Act states that there arise a presumption that the incidence of duty has been passed on to the customers. It also states that every person who has paid the duty on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods. Therefore, it is clear that it is rebuttable presumption. To rebut such presumption, the assessee has produced auditor report required to claim the refund of special additional duty. The auditor has unequivocally stated in his report that the burden has not been passed on directly or indirectly and in coming to such conclusion, they have taken into account how the price of the traded goods has been arrived for this purpose. Therefore, such presumption stands rebutted. No substantial question of law would arise - Decided against Revenue.

Summary

Issues:
1. Refund claim under Section 27 of the Customs Act, 1962.
2. Rejection of refund claim by adjudicating authority.
3. Appeal before Commissioner of Customs (Appeals) and subsequent decision.
4. Appeal by Revenue to CESTAT and its decision.
5. Contention of Revenue regarding non-compliance with notification terms and passing on duty to customers.
6. Arguments supporting the impugned order.
7. Consideration of unjust enrichment aspect and rebuttal of presumption of passing on duty.

Analysis:

1. The case involved a refund claim under Section 27 of the Customs Act, 1962. The appellant, M/s. Apple India Pvt. Ltd., filed a refund for the Special Additional Duty (ADC/SAD) paid while importing goods, as per relevant notifications.

2. The adjudicating authority initially rejected the refund claim citing failure to prove non-passing of duty incidence to customers and lack of required documents. The Commissioner of Customs (Appeals) later allowed the appeal after considering the material on record.

3. The Revenue then appealed to the CESTAT, which observed from the audit report that the duty burden had not been passed on to domestic customers. Consequently, the Tribunal dismissed the Revenue's appeal.

4. The Revenue challenged the Tribunal's order, arguing non-production of all certificates as per notification terms and failure to establish non-passing of duty to customers. The Revenue contended that both the Appellate Authorities were unjustified in their decisions.

5. On the contrary, the counsel for the assessee supported the impugned order, emphasizing compliance with notification conditions and non-passing of duty incidence to customers.

6. The Tribunal's order highlighted that all conditions of the notification were fulfilled except for the unjust enrichment aspect, which was prescribed by the Board. The rebuttable presumption under Section 28D of the Act regarding passing on duty incidence was discussed, emphasizing the need to prove non-passing through an auditor report.

7. The Court found no merit in the Revenue's appeal, stating that no substantial question of law arose. The appeal was dismissed based on the rebuttal of the presumption of passing on duty incidence and the fulfillment of notification conditions.