2017 (10) TMI 672 - HC - Customs

Refund claim - unjust enrichment - duty paid and duty benefit claimed under the notification dated 19th May 2002 for import of goods under advance licences dated 23rd January 1995 and for import of goods under advance licences dated 7th February 1995 - denial of refund on the ground that the respondent did not comply with the mandatory requirement of furnishing documents as set out in clause 9 - Held that - no statutory provision or a provision of statutory rules is shown to us which makes the production of documents listed in clause9 of the prescribed form of refund as mandatory. On the contrary, perusal of clause9 would show that the requirement is not mandatory. Clause9 only contains the list of enclosures which could be submitted along with refund application. Clause9 merely requires the applicant to tick mark against the documents showing that the said documents have been produced with refund application. By no stretch of imagination, it can be said that the requirement of production of documents listed in clause9 of the refund application form is mandatory. The Appellate Tribunal has held that the exempt material was not sold in the local market and was used in the manufacture of exported goods and, therefore, question of passing the incidence does not arise - there is a finding of fact recorded that balance sheet of the respondent produced on record with corresponding ledger accounts clearly show that the amount of deposit is shown in the books of account of the respondent - the findings of fact recorded by the Appellate Tribunal are on the basis of admitted position recorded by the Appellate Tribunal and in any event, the findings are supported by the documents on record. Refund to be allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund applications rejection based on non-compliance with mandatory document submission requirements.
2. Dispute over the mandatory nature of document submission in refund applications.
3. Findings of the Appellate Tribunal regarding non-requirement of specific documents for refund consideration.
4. Applicability of procedural requirements in refund applications.
5. Justification of rejecting refund claims solely based on non-production of documents.

Analysis:
1. The judgment concerns two refund applications filed by the respondent-assessee, seeking refunds for duty paid and duty benefits claimed under specific notifications for importing goods. The applications were initially rejected, leading to appeals before the Commissioner of Customs (Appeals) and subsequently the Appellate Tribunal, which allowed the appeals by overturning the previous orders.

2. The appellant contested the judgment on the grounds that the respondent failed to disclose mandatory details in the refund claim application, specifically related to the passing on of the claimed refund amount and the necessary document submissions. The appellant highlighted the non-compliance with clause9 requirements, emphasizing the absence of essential documents like Bill of Entry, Customs attested invoice, and packing lists.

3. The Appellate Tribunal's findings indicated that the mandatory nature of document submission in clause9 was not established, as the clause merely listed enclosures that could be submitted with the refund application. The Tribunal reasoned that the production of specific documents was not crucial for refund consideration, especially in cases where the export obligations were fulfilled, and the incidence of duty was not passed on to consumers.

4. The judgment clarified that even if certain documents were mentioned in the refund application form, their submission was deemed procedural rather than mandatory. The authorities were expected to assess whether the submitted documents were sufficient to process the refund claim, rather than outright rejecting claims solely based on non-production of listed documents.

5. Ultimately, the High Court dismissed the appeal, concluding that no substantial question of law arose from the case. The judgment emphasized that the Appellate Tribunal's findings were based on admitted facts and supported by the available documentation, indicating that the rejection of refund claims based solely on non-compliance with document submission requirements was unjustified.