2017 (1) TMI 690 - AT - Customs

Refund - unjust enrichment - Revenue filed the appeal before the Commissioner (A) mainly on the ground that while sanctioning the refund amount, the Asst. Commissioner of Customs ought to have verified whether the incidence of duty had been passed on to any other person or not and if the same has been passed on, then the refund amount should be ordered to be credited to Consumer Welfare Fund. Further, the department has also taken the objection that the Asst. Commissioner has not verified the balance sheet and other related financial records in order to decide whether the assessee had passed on or not, the incidence of duty. Held that - this case needs to be remanded back to the original authority to verify all the documents including the balance sheet and other financial records to decide regarding the passing on incidence of duty by the appellant - appeal allowed by way of remand.

Summary

Issues:
Appeal against order allowing department appeal and setting aside Order-in-Original due to excess payment of export duty. Verification of passing on incidence of duty by appellant. Compliance with Circular No.7/2008/Cus. and Section 28D of Customs Act, 1962.

Analysis:
The appeal was filed against an order by the Commissioner (A) setting aside the Order-in-Original due to excess payment of export duty by the appellant. The appellant exported iron ore fines and paid export duty provisionally, later found to be in excess. The refund claim was filed and initially sanctioned by the Asst. Commissioner, but the Revenue appealed, contending that the duty incidence passing on verification was not done. The Commissioner (A) allowed the Revenue's appeal, leading to the present appeal.

The appellant argued that the impugned order was passed without appreciating the facts, emphasizing that the excess duty was not passed on to any other person as confirmed by a Chartered Accountant certificate. The appellant maintained that the Asst. Commissioner had thoroughly examined all documents and financial records, rendering the Commissioner (A)'s findings erroneous. On the other hand, the AR supported the impugned order, citing Circular No.7/2008/Cus. and Section 28D of the Customs Act, 1962, which require verification of financial records to determine duty passing on.

After hearing both parties and reviewing the records, the Judicial Member found it necessary to remand the case to the original authority for further verification. The Member emphasized the need to examine all documents, including the balance sheet and financial records, to ascertain whether the duty incidence had been passed on by the appellant. The decision was to set aside the impugned order and remand the case for a reasoned order after ensuring compliance with the principles of natural justice. The operative portion of the order was pronounced in open court on 02/01/2017.