2015 (10) TMI 184 - AT - Customs

Rejection of Refund claim Commissioner upheld order of rejection of refund applications of appellant on ground that amount in refund application and as claimed to be deposited is not reconcilable Held that - no dispute that amount for which refund is sought for by both appellants are over and above adjudged amount confirmed in demand order therefore it is clear that this amount is, in principle, refundable to persons who deposited In view of said no reason found in rejection of refund applications of appellants Once Commissioner explicitly confirmed deposit and given attested copies of TR 6 challan and also deposit has been recorded in demand order, refund claim should not have been rejected When payment as per adjudication order is known to assessing authority, refund as per appellate order is duty of assessing authority Assessing authority cannot retain amount and deprive assessee of use of his money unreasonably Impugned order rejecting claim for refund set aside Decided in favour of Assesse.

Summary

Issues:
Refund claim rejection based on reconciliation of deposited amount; Dispute over TR 6 challan details and original documents submission; Refund sought by multiple appellants; Unjust enrichment aspect in refund claim.

Analysis:
The judgment involved two appeals against the rejection of refund claims by the Commissioner of Customs (Appeals) Mumbai Zone-I. The case pertained to an investigation regarding contravention of DEEC notification conditions, resulting in deposits by the appellants. The original authority confirmed demands and penalties, which were subsequently appealed by one of the appellants, leading to a reduction in penalties. Refund applications were then filed by both appellants, which were rejected by the Asst. Commissioner of Customs and upheld by the Commissioner (Appeals), prompting the appeals before the tribunal.

The main issue revolved around the reconciliation of the deposited amounts as per TR 6 challans and the original documents submission. The appellants argued that though the original TR 6 challans were not available, the deposit was confirmed in the adjudication order and supported by attested photocopies provided by the department. The tribunal noted that the amount for refund was over and above the adjudged amount, making it refundable. The tribunal agreed with the appellants' counsel that the refund should not be rejected solely due to non-submission of original documents when the deposit was confirmed by the authorities.

Another crucial aspect was the multiple appellants seeking refund, leading to questions on the allocation of the refund between the companies. The tribunal emphasized the need for proper verification of the financial accounts of both appellants to determine the refund distribution accurately. The tribunal suggested obtaining affidavits of disclaimer from both appellants to prevent future claims or disputes.

Regarding unjust enrichment, the tribunal directed the original authority to verify this aspect despite initial indications in the balance sheets that the refund amount had not been passed on. The tribunal set aside the rejection orders and instructed the original authority to reconsider the refund claims in light of the observations made, emphasizing the importance of adhering to legal principles and ensuring fair treatment in refund matters.

In conclusion, the tribunal's detailed analysis addressed the issues of reconciliation, original documents submission, multiple appellants, and unjust enrichment, providing a comprehensive judgment that upheld the principles of fairness and proper verification in refund cases.