2016 (11) TMI 1137 - AT - Customs

Refund claim - principles of unjust enrichment - Held that - it is not clear firstly the material cost shown as ₹ 23,535/-. No bifurcation of assessable value plus duty was given. Secondly no supporting of other elements such as freight, warranty spares, sales tax, dealer scheme, etc. was given. In the absence of any documentary evidence, it is difficult to ascertain whether the excess paid CVD for which refund was sought for is included in the price of the product or otherwise, which is necessary to establish whether the incidence of duty was passed on or otherwise. In this situation, the matter needs to be remanded to the original adjudicating authority. The appellant has to provide the supporting documentary evidence to the adjudicating authority who shall pass a denovo adjudication order after verification of the same - appeal allowed by way of remand.

Issues:
1. Levy of Countervailing Duty (CVD) on imported Colour TV sets based on MRP declared by the appellant.
2. Refund of excess CVD payment and its crediting to the Consumer Welfare Fund.
3. Applicability of unjust enrichment in the case.
4. Lack of documentary evidence to establish whether the incidence of duty was passed on.

Analysis:
1. The appellant imported Colour TV sets, and a dispute arose regarding the levy of CVD based on the MRP declared by the appellant. The lower authority determined the CVD at 16% on the MRP declared by the appellant, leading to an excess payment by the appellant. The appellant sought a refund of ?10,00,431, which was credited to the Consumer Welfare Fund by the adjudicating authority on the grounds of unjust enrichment. The appellant contended that the excess duty paid did not influence the sale value of the goods as they were sold on MRP-based valuation. The Tribunal observed discrepancies in the costing details provided by the appellant and remanded the matter to the original adjudicating authority for a fresh order after verifying the documentary evidence.

2. The issue of refund of the excess CVD payment and its crediting to the Consumer Welfare Fund was a key point of contention. The appellant argued that the excess duty paid was not included in the costing of the TV sets and hence was not passed on. However, the Tribunal noted the lack of supporting documentary evidence to establish whether the excess CVD payment was indeed included in the price of the product. Consequently, the Tribunal allowed the appeal by remanding the matter for further adjudication with specific instructions for the appellant to provide necessary documentary evidence to establish the non-passing of the duty incidence.

3. The concept of unjust enrichment was raised concerning the refund claim. The appellant contended that the excess duty paid did not impact the sale value of the goods, thereby asserting that unjust enrichment did not apply. However, the Tribunal emphasized the need for concrete evidence to substantiate this claim and directed the appellant to provide supporting documentation to prove that the burden of the excess duty was not passed on to any other party. This aspect was crucial in determining the validity of the refund claim and the application of unjust enrichment principles.

4. The Tribunal highlighted the lack of clarity in the documentary evidence provided by the appellant regarding the cost components of the TV sets and the inclusion of the excess CVD payment in the product price. The absence of detailed breakdowns and supporting documents made it challenging to ascertain whether the duty incidence was passed on or not. As a result, the Tribunal ordered a remand to the original adjudicating authority for a thorough examination of the evidence and a fresh decision based on the verified information. The appellant was granted the opportunity for a personal hearing during the denovo adjudication process to ensure procedural fairness.

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