2017 (7) TMI 218 - AT - Customs

Refund claim - rejection on the ground that descriptions of the imported goods mentioned in the Bills of Entry, were not exactly the same as reflected in the commercial sales invoices - Held that - No contrary evidence has been recorded by the ld. Commissioner (Appeals) to show that the VAT/CST was not paid on the imported goods in the impugned order except observing that VAT/CST amount is not mentioned against each of the imported items cleared/sold as such with the main machines accordingly they failed to fulfil the condition of the Notification. Unjust enrichment - refund claim rejected on the ground that the appellant could not establish that the incidence of the refund amount allowed as refund to them, had borne by them and not been passed on to the customers - Held that - vide Circular Dated 6/2008-Cus dated 28.04.2008, the Board has clarified that to satisfy the condition of unjust enrichment, certificate from Chartered Accountant would suffice, but later further clarified that the Chartered Accountant should also be the statutory auditor of the claimant company in its subsequent Circular dated 8.7.2010. Further, it is clarified that once a certificate from Chartered Accountant, who is also statutory auditor, if filed by the appellant, then there is no need for insisting on production of audited Balance Sheet and Profit and Loss Account. In these circumstances, the observation of the Ld. Commissioner (Appeals), that the appellant by including the refund amount as expenses in their profit and loss account and hence the burden must have been passed on to their customers is without any corroborative evidence - refund allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Refund claims of 4% SAD paid at the time of import of goods
- Rejection of refund claims by the Commissioner of Customs (Appeals)
- Burden of unjust enrichment on the appellant
- Certification by Chartered Accountant regarding VAT/CST payment
- Interpretation of circulars issued by CBEC
- Findings of the Ld. Commissioner (Appeals) on the issue of unjust enrichment

Analysis:

Refund Claims and Rejection by Commissioner of Customs (Appeals):
The appeals were filed against the orders passed by the Commissioner of Customs (Appeals) rejecting the refund claims of 4% SAD paid at the time of import of goods. The adjudicating authority had initially sanctioned the refund claims, but the Commissioner (Appeals) set aside these orders and allowed the Revenue's appeal. The issue involved in all appeals was common, leading to their joint disposal.

Certification by Chartered Accountant and VAT/CST Payment:
The appellant submitted that the imported goods were sold as such along with accessories, and VAT/CST had been paid on the goods sold. Each refund claim was supported by a Chartered Accountant's Certificate confirming the payment of appropriate VAT/CST. The statutory auditor certified that the burden of the 4% SAD claimed as a refund had not been passed on to customers but absorbed by the appellant. The appellant argued that the Commissioner (Appeals) erred in assuming the burden had been passed on based on the inclusion of the refund amount in the profit and loss account.

Interpretation of Circulars and Unjust Enrichment:
The Tribunal referred to circulars issued by the CBEC, clarifying that a certificate from a Chartered Accountant, who is also the statutory auditor, would be sufficient to verify unjust enrichment for processing SAD refunds quickly. The Tribunal emphasized that the Commissioner (Appeals) erred in discarding the Chartered Accountant's certificate and concluding that the burden of duty had been passed on to customers. The Tribunal found no merit in the Commissioner's reasoning and set aside the impugned orders, allowing the appeals with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the orders of the Commissioner of Customs (Appeals) and allowing the appeals with consequential relief as per the law. The judgment highlighted the importance of the Chartered Accountant's certification in verifying unjust enrichment for SAD refunds and emphasized the significance of following CBEC circulars in such matters.

This detailed analysis of the judgment addresses the issues involved, the arguments presented by both sides, the interpretation of relevant legal provisions and circulars, and the final decision of the Tribunal.