2018 (11) TMI 1100 - AT - Customs

Refund of excess amount paid - amount credited to Consumer Welfare Fund - unjust enrichment - Held that - The certificate of the Chartered Accountant referred, as submitted by the Ld. Advocate, is directed to be considered, forms the essential document per se. The other document namely the certificate from the statutory auditor as required by the Commissioner (Appeals) herein could only be considered at best a supporting evidence only if there was any iota of doubt on the primary evidence namely the Certificate of Chartered Accountant referred to and accepted by the Hon ble High Court. Therefore, the certificate of statutory auditor required and observed by the Commissioner (Appeals) as not furnished, could not be treated as a primary document itself, to deny any benefit in the nature of refund as in the case on hand. The concept of unjust enrichment has a serious impact and has to be weighed carefully by the revenue and it cannot be an automatic choice for the revenue to reject every claim and credit / deposit the amount into Consumer Welfare Fund under the guise of unjust enrichment - In the case on hand, the first certificate of Chartered Accountant accepted by the Hon ble High Court itself contained a specific plea that the assessee / appellant has not passed on the duty incidence to its customers, which fact has not at all been disputed by the authorities below. This itself carves the case of the appellant out of mischief of Section 11B and the scope of unjust enrichment . The rejection of refund by the revenue authorities is contrary to law and unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for refund of excess amount paid, rejection of refund by lower authorities, consideration of additional evidence, unjust enrichment, Consumer Welfare Fund.

Analysis:
The appeal was filed by the assessee seeking a refund of an excess amount paid due to a mistake in not claiming a concessional rate of duty for imported medical equipment. The original authority sanctioned the refund, but it was credited to the Consumer Welfare Fund. The Commissioner (Appeals) rejected the prayer, which was further denied by CESTAT, Chennai. The Hon'ble High Court of Madras remanded the matter back to the Commissioner (Appeals) for fresh consideration. However, the Commissioner (Appeals) rejected the prayer on different grounds beyond the scope of remand.

During the hearing, the Advocate for the appellant argued that the Certificate issued by the Chartered Accountant, not specifically rejected, should be deemed accepted, as per the direction of the High Court. The Tribunal found merit in this submission, emphasizing that the Certificate of the Chartered Accountant was the essential document, while the certificate from the statutory auditor was only supporting evidence. The rejection of the refund based on the statutory auditor's certificate was deemed incorrect.

The Tribunal highlighted the concept of unjust enrichment, emphasizing that it should be carefully considered by the revenue authorities. The authorities cannot automatically reject claims and credit the amount to the Consumer Welfare Fund without proper justification. The scope of amounts to be deposited in the Fund is limited and specific, and the provision should not be invoked based on assumptions. In this case, the Certificate of the Chartered Accountant stated that the duty incidence was not passed on to customers, a fact undisputed by the authorities, indicating that unjust enrichment did not apply.

Based on the above observations, the Tribunal concluded that the rejection of the refund by the revenue authorities was contrary to law and unsustainable. Therefore, the Tribunal set aside the rejection and allowed the appeal with consequential reliefs, if any.