2008 (9) TMI 62 - SC - Customs

Duty paid under protest - refund claim - in the invoices, it was clearly mentioned that the sale price did not include the customs duty - there was no change in price post-levying of the duty - auditor s certificate certifying that assessee had not passed on the customs duty to customers considering all the facts finding of tribunal that principle of unjust enrichment is not applicable, require no interference revenue s appeal is dismissed - assessee would be entitled to the refund

Summary

Issues:
1. Classification of imported goods under Customs Tariff Act.
2. Entitlement to refund of customs duty.
3. Burden of proof regarding passing on of customs duty to customers.

Classification of imported goods under Customs Tariff Act:
The case involved the classification of Agglutinating Sera for the detection of human chorionic gonadotrophin in urine under Sub-Heading 3002.90 of the First Schedule to the Customs Tariff Act. The assessee claimed that the goods were exempt from customs duty under Notification No. 208/81-Cus. The customs authorities initially disagreed and demanded payment of Rs. 94,86,522 as customs duty. However, the Tribunal eventually ruled in favor of the assessee, classifying the goods under Sub-Heading 3002.90 and exempting them from customs duty. This decision was final.

Entitlement to refund of customs duty:
Following the classification issue, the assessee filed an application for a refund of the customs duty paid 'Under Protest'. The authority-in-original rejected the claim, citing the doctrine of unjust enrichment under Sections 27, 28(C) and (D) of the Act. The Commissioner of Customs (Appeals) upheld this decision. However, the Tribunal, after a difference of opinion between its members, ultimately ruled in favor of the assessee. The Member (Technical) and a third Member found that the burden of proof regarding passing on the customs duty to customers lay with the assessee. They based their decision on evidence such as invoices stating that the sale price did not include customs duty, no change in price post-duty imposition, and an auditor's certificate confirming non-passing on of customs duty. Consequently, the Tribunal held that the assessee was entitled to a refund of the customs duty.

Burden of proof regarding passing on of customs duty to customers:
The crux of the issue revolved around whether the burden of proof regarding the passing on of customs duty to customers rested with the assessee. The Tribunal, through its members' opinions, highlighted that the burden indeed lay with the assessee. They relied on evidence such as invoices, price lists, and an auditor's certificate to conclude that the customs duty burden had not been passed on to customers. This factual finding, based on concrete evidence, was deemed sufficient to support the assessee's entitlement to a refund of the customs duty. As a result, the appeal was dismissed in favor of the assessee, with no costs imposed.