2008 (10) TMI 206 - AT - Customs

Refund of special additional duty (SAD) of customs paid without availing exemption notification at the time of refund sanctioned goods were still lying in the godown - The amount was taken as recoverable deposit in the balance sheet and was not debited to the expense account - A certificate from a Chartered Accountant was also submitted, who has certified that the amount was not included in the cost of production and was not recovered from the customers. Sale invoices were also produced which do not show recovery of duty from the customers - Refund allowed.

Summary

Issues:
1. Refund of Special Additional Duty (SAD) on imported goods.
2. Unjust enrichment.
3. Rejection of refund claim by Commissioner (Appeals).

Analysis:
1. The appellant imported refined Paraffin Wax and applied for a refund of SAD as per Notification No.18/2000 exempting petroleum products from SAD. The Asst. Commissioner sanctioned the refund, finding no unjust enrichment as the goods were unsold. However, the refund was later credited to the Consumer Welfare Fund based on the claim that duty incidence had been passed on.

2. The appellant contended that the goods were unsold when the refund was sanctioned, proving no passing of duty incidence. The Chartered Accountant certified that duty was not included in production costs, and the amount was shown as recoverable in the balance sheet. Despite this, the Commissioner (Appeals) rejected the claim, questioning the CA's certificate's conclusiveness and the validity of the Central Excise Officers' certificate.

3. The Tribunal found that since the goods were unsold when the refund was sanctioned, duty incidence had not been passed on. The CA's certification and balance sheet entry supported this, and the Commissioner (Appeals) should have verified the financial records instead of outright rejection. Citing precedents, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and granting consequential relief to the appellant.