2016 (7) TMI 978 - AT - Customs

Refund - unjust enrichment - Whether Chartered Accountant certificate alone is sufficient to show that the burden of duty has not been passed on to their customers. - Held that - t is observed that the said certificate is supported by the entry in the Balance Sheet and ledger account under which the amount is shown as Import Duty fine and penalty by Customs Department and shown as Receivable . The department has not questioned the correctness or accuracy of the said certificate of Chartered Accountant or the entry in the books of accounts - it is clear that the said amount has not been passed on to the customers. - Refund allowed.

Summary

Issues:
1. Appeal against the Order-in-Appeal allowing recovery of erroneously refunded amount.
2. Validity of Chartered Accountant certificate as proof of duty not being passed on to customers.
3. Interpretation of balance sheet and ledger account entries regarding import duty, fine, and penalty.
4. Determination of whether duty amount has been passed on to customers.

Detailed Analysis:
1. The appeal was filed against the Order-in-Appeal dated 10.08.2015, which allowed the department's appeal for the recovery of a refund amount of ?19,92,811 that was allegedly erroneously paid to the appellants. The appellants submitted a letter requesting the appeal to be decided on merit, leading to the case being taken up for disposal.

2. The Commissioner (Appeals) based the decision on the Chartered Accountant certificate, stating that it alone was insufficient to prove that the burden of duty had not been passed on to customers. The certificate provided details of the payment made by the appellants and the outstanding amount under "Import Duty Receivable." The Revenue's appeal was allowed solely on this ground.

3. The certificate was supported by entries in the Balance Sheet and ledger account, showing the amount of ?19,92,811 as Import Duty, fine, and penalty by the Customs Department, marked as "Receivable." The appellants had melted the imported Brass Scrap for manufacturing ingots without selling it in its original form, indicating no passing on of duty. The division of the amount into penalty, fine, and duty components was also highlighted.

4. The Tribunal found that the entire amount of ?19,92,811 was still shown as outstanding in the balance sheet and certified by the Chartered Accountant, indicating that it had not been passed on to customers. Therefore, the refund amount sanctioned by the Deputy Commissioner was not considered erroneously refunded, leading to the setting aside of the impugned Order-in-Appeal and allowing the appeal.

In conclusion, the Tribunal allowed the appeal, emphasizing that the duty amount had not been passed on to customers based on the evidence presented, including the Chartered Accountant certificate and the entries in the balance sheet and ledger account.