2016 (3) TMI 773 - AT - Customs

Refund claim of SAD paid - unjust enrichment - Goods imported for consumption but subsequently sold on charging sales tax, service tax and VAT - Rejected only on the ground that the balance sheets which were submitted initially along with the refund claims did not show the amount as receivable while subsequent revised balance sheets indicate the said amount as amount receivable Held that - the balance sheets which were revised and filed with the Income Tax authorities and additional income tax was also paid on such balance sheet needs to be considered in this case as an evidence in support of non-passing of the incidence of duty. In the revised balance sheet the amount of refund claim is indicated as amount receivable which indicates that the appellant had paid the entire amount from their pocket on which refund is claimed. Therefore, the refund claim is allowed by applying the judgment of Hon ble High Court of Madras in the case of CCE Chennai vs. Sarlee Household & Bodycare India Pvt. Ltd. 2007 (6) TMI 55 - HIGH COURT, MADRAS . - Decided in favour of appellant with consequential relief

Summary

Issues:
Refund claims of SAD paid on imported goods subsequently sold with sales tax, service tax, and VAT; Rejection of refund claims based on balance sheet discrepancies.

Analysis:
The appeals were against Orders-in-Appeal directing refund claims of SAD to be rejected due to balance sheet discrepancies. The adjudicating authority allowed the refund, but the Reviewing Authority directed the department to appeal. The first appellate authority rejected the refund claims, leading to the current appeal.

The main issue was whether the refund claims should be rejected solely based on initial balance sheet discrepancies. The Counsel argued citing Tribunal decisions and Board's Circular supporting the refund. The Department argued that revised balance sheets were filed after objections, and the CA certificates were not from statutory auditors. They referenced a High Court judgment requiring evidence beyond CA certificates for refund.

The Tribunal considered both sides' submissions and the records. They found the adjudicating authority's conclusion based on documents that SAD was not passed on, supported by relevant judgments. The first appellate authority's argument on balance sheet revision leading to unjust enrichment was deemed incorrect. The revised balance sheets filed with Income Tax authorities, indicating the refund amount as receivable, supported the non-passing of duty incidence.

Regarding the Department's reference to a High Court judgment, the Tribunal distinguished the case, noting the lack of evidence beyond CA certificates. They rejected the Department's plea to remit the case based on a different Tribunal case outcome. Ultimately, the Tribunal held the impugned orders unsustainable, setting them aside and allowing the appeals with consequential relief.