2019 (6) TMI 1542 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus., dated 14-9-2007 - Denial on the ground of principles of unjust enrichment - HELD THAT - The appellant had mentioned the SAD amount as (0). Thus, it is evident that no SAD benefit has been passed on by the appellant and the incidence of such amount has been borne by the appellant. Further, due to typographical error, the appellant failed to indicate that no credit shall be admissible. Such non-endorsement as per the requirement of the notification is procedural in nature, for which the benefit of refund cannot be denied to the appellant. In this case, since the appellant had not passed on the SAD element to its buyers, which is manifest from the available records, denial of refund benefit on the ground of unjust enrichment cannot stand for judicial scrutiny. Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of refund benefit under Notification No. 102/2007-Cus., compliance with conditions of the notification, passing on of SAD incidence to buyers, unjust enrichment

The judgment revolves around the denial of a refund benefit provided under Notification No. 102/2007-Cus. The appellant had imported goods and sold them in the domestic market, subsequently filing refund applications for the Additional Duty of Customs (SAD) paid during importation. The department contested the refund on the grounds of non-compliance with the notification's conditions, specifically regarding the endorsement of no Cenvat credit applicability in the invoices issued to traders. The Commissioner (Appeals) allowed the department's appeal, stating that the SAD incidence had been passed on to buyers. The appellant challenged this decision before the Tribunal.

Upon review, the Tribunal observed that the appellant had not passed on the SAD benefit to buyers, as evidenced by the invoices showing SAD amount as (0). Although there was a typographical error in not indicating the inapplicability of Cenvat credit, the Tribunal deemed it a procedural issue that should not result in denying the refund. The Tribunal concluded that since the SAD element was not passed on to buyers, the denial of the refund benefit on the grounds of unjust enrichment was not justified.

In light of these findings, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The decision emphasized that the denial of the refund benefit based on unjust enrichment was not valid in this case, given that the appellant had not transferred the SAD incidence to buyers.