2018 (8) TMI 46 - AT - Customs

Refund claim - whether the appellant is able to prove the hurdle of unjust enrichment has been passed on or not? - Held that - As against clear evidence from the Chartered Accountant Revenue has not adduced contrary evidence to show that appellant herein had passed on the incidence of duty. In the absence of any contrary evidence it is to be held that the Chartered Accountant s Certificate as produced by appellant needs to be accepted. Hon ble High Court of Madras in the case of Micromax Informatics 2017 (7) TMI 551 - MADRAS HIGH COURT on identical set of facts held that refund is admissible. Thus the Lower Authorities have erred in coming to a conclusion that the appellant herein has not passed the hurdle of unjust enrichment - appeall allowed - decided in favor of appellant.

Issues Involved:
1. Eligibility for concessional rate of duty.
2. Finality of the assessment of bills of entry.
3. Admissibility of refund claims without challenging the assessment order.
4. Test of unjust enrichment.
5. Limitation period for filing refund claims.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty:
The appellants imported mobile phones under sub-heading No. 85171290 of the Customs Tariff Act, 1975, and paid duty at 6% CVD and 1% NCD. They later claimed a refund based on the Supreme Court decision in SRF Ltd. v. Commissioner of Customs, arguing they were eligible for a concessional CVD rate of 1% ad valorem under Notification No. 12/2012-CE. The original authority rejected this claim, stating that the exemption was conditional and required compliance before assessment, which the appellants did not demonstrate.

2. Finality of the Assessment of Bills of Entry:
The original authority held that the assessment of the bills of entry was final and could not be reopened at a later stage for claiming refunds. The First Appellate Authority, however, agreed with the appellants that there was no necessity for reassessment of duty liability and that the excess duty paid should be considered within the limitation period.

3. Admissibility of Refund Claims without Challenging the Assessment Order:
The original authority and the First Appellate Authority both held that the refund claims were inadmissible without challenging the initial assessment order. The appellants argued that the issue of unjust enrichment was not raised in the show cause notice and that they provided a Chartered Accountant’s certificate to prove that the duty incidence was not passed on to their customers.

4. Test of Unjust Enrichment:
The original authority rejected the refund claims on the grounds of unjust enrichment, stating that the appellants failed to disprove the presumption under Section 28 of the Customs Act, 1962, that the burden of duty had been passed on to the buyers. The First Appellate Authority also rejected the appeals on this ground. However, the Tribunal found that the Chartered Accountant’s certificate provided clear evidence that the duty incidence was not passed on, and the Revenue did not provide contrary evidence.

5. Limitation Period for Filing Refund Claims:
The original authority held that the refund claims for four bills of entry were time-barred under Section 27 of the Customs Act, 1962. The First Appellate Authority did not specifically address this issue in its decision.

Conclusion:
The Tribunal held that the appellants had successfully demonstrated that the incidence of duty was not passed on to the customers based on the Chartered Accountant’s certificate. The Tribunal also noted that several High Court decisions, including those in Yu Televentures Pvt. Ltd. and Vishal Video and Appliances Ltd., supported the appellants' position. Consequently, the Tribunal set aside the impugned order on the issue of unjust enrichment and allowed the appeals with consequential reliefs.

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