2005 (5) TMI 134 - AT - Customs

Summary

Issues:
1. Claim for refund of customs duty paid on imported goods under partial exemption notification.
2. Application of doctrine of unjust enrichment.
3. Contention regarding indirect passing on of duty burden.
4. Interpretation of certificates from Cost Accountants and Chartered Accountants.
5. Applicability of previous tribunal decisions.
6. Comparison with the decision of the Apex Court in Union of India v. Solar Pesticide Pvt. Ltd.

Analysis:
1. The appellant imported socks knitting machines and cleared them on duty payment. A claim for refund of approximately Rs. 13 lakhs of customs duty was made under Notification No. 17/2001-Cus. The claim was rejected citing the doctrine of unjust enrichment as the duty was considered to be indirectly passed on to the purchasers of the finished products.

2. The appellant contended that the duty burden was not indirectly passed on, contrary to the Commissioner's finding. Certificates from Cost Accountants and Chartered Accountants were presented as evidence to support this claim. The certificates indicated that the duty amount had not been included in the cost of the machines, thus challenging the presumption of indirect passing of duty.

3. The Departmental Representative argued that the decision in Union of India v. Solar Pesticide Pvt. Ltd. applied to capital goods as well, making the refund impermissible. However, the Tribunal found that the certificates clearly demonstrated that the duty had not been passed on, satisfying the legal requirement for refund eligibility.

4. The Tribunal emphasized that passing on of duty is a factual matter. Since the certificates from the Cost Accountants and Chartered Accountants confirmed that the duty had not been passed on, the denial of refund by the Commissioner was based on a presumption that was not supported by the evidence. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

5. The Tribunal referred to a previous tribunal decision involving a similar issue where the refund was granted, supporting the appellant's case. The comparison with the decision in Union of India v. Solar Pesticide Pvt. Ltd. was made to distinguish the applicability of the doctrine of unjust enrichment in this context.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, evidentiary considerations, and the Tribunal's decision, providing a comprehensive understanding of the case.