2005 (6) TMI 106 - AT - Customs

Refund claim - extra duty deposit - Unjust enrichment - HELD THAT - The appellants have furnished enormous evidence to show that the extra duty deposit has not been passed on to the buyers of the goods. They have explained the reason for showing the amount in the accounts of the year 2000-01 as the amount receivable and not in the year 1995. They have explained that in the year 1995 when the imports were made and they were asked to pay extra duty deposit by the Customs they were not very sure of getting back the money from the Customs. The fact is that the money is not payable was confirmed only in 2001. This is the reason for showing the duty as receivable in the accounts of 2000-01. In our view this explanation is acceptable. Moreover the appellants have also demonstrated that the prices before import and subsequently remain the same. In our view sufficient evidence has been produced by the appellants to prove that they have not passed on the duty burden to their buyers. The Apex Court in the case of Mahavir Aluminium Ltd. v. Collector of Central Excise 1999 (3) TMI 89 - SUPREME COURT has rejected the Department s plea that refund of the amount pre-deposited for hearing of an appeal not to be released to the assessee unless it is established that he has not wrongly enriched himself by collecting duty from his customers. The High Court of Judicature at Bombay in the case of Suvidhe Ltd. v. Union of India 1996 (2) TMI 136 - BOMBAY HIGH COURT has held that provisions of Section 11B can never be applicable to the deposit made under Section 35F. In our view the ratio of these decisions is clearly applicable to the present case. Hence we allow the appeal with consequential relief.

Summary

Issues:
Refund of extra duty deposit due to unjust enrichment.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Customs (Appeals), Chennai regarding the refund of extra duty deposit paid by the appellants. The appellants imported electric power tools and made a provisional clearance on execution of a written bond. They paid extra duty deposit on each clearance, totaling Rs. 4,18,574/-. The Customs authorities later accepted the invoice value, and the assessment was completed. The appellants then filed a refund application, which was credited to the Consumer Welfare Funds on the ground of unjust enrichment. The appellants contended that they had not passed on the duty burden to their customers and provided evidence to support their claim.

The learned Advocate for the appellants argued that the appellate authority ignored Tribunal rulings stating that if prices remained the same before and after payment, the duty burden was not passed on to customers. They also highlighted that the Tribunal had consistently held that no adverse presumption should be made if duty was not shown separately as long as prices remained the same. The appellants provided evidence showing the amounts as receivables only in the financial year 2000-01, in line with accounting standards. The lower authority was criticized for ignoring documentary evidence supporting the appellants' claim.

The learned SDR argued that since the amount was shown as receivables in 2000-01 despite imports in 1995, the refund claim was rightly rejected. However, upon careful examination of the case records, the Tribunal found that the duty deposit was refundable as the Customs authorities confirmed the correct value shown in the invoices. The appellants' explanation for showing the duty as receivable in 2000-01 was accepted, considering the uncertainty of refund in 1995. The Tribunal also noted that the prices before and after import remained the same, indicating that the duty burden was not passed on to customers. Citing various legal precedents, including decisions by the Apex Court and High Courts, the Tribunal allowed the appeal, emphasizing that the appellants had not wrongly enriched themselves and were entitled to the refund of the duty deposit.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellants and granting consequential relief based on the evidence presented and legal principles applied in similar cases.