2025 (2) TMI 692 - AT - Customs

Refund claim - amount paid by the appellants twice through their customs broker towards import duty liability for the imports - HELD THAT - All the relevant issues relating to grant of refund has been examined by the original authority to ascertain the fact whether the import duty has been twice on the very same consignment of imported goods. However it is found that the learned Commissioner (Appeals) had held that the appellant importer have neither paid impugned duty not they submitted any documentary evidence that the said duty for which they are claiming refund has been borne by them. Further on careful perusal of the records of the case it is amply clear that in respect of imports through courier mode the importer has to file the Bill of Entry through authorised customs broker. Such customs broker besides providing assistance for clearance of goods from customs control may also provide services such as logistics payment of duty on behalf of the importer as their agent which charges are reimbursed by the importer on actual basis - The documents such as Bill of Entry for which the import duty has been assessed under the Customs statute and the challans in which the customs duty have been paid twice for the same amount and for the very same Bill of Entry are sufficiently evidence that the customs duty has been paid twice for one import. Further the chartered accountant certificate dated 23.08.2019 produced by the importer -appellants also demonstrates that the burden of duty have been borne by them on being had to pay the customs duty twice and they had not passed on such burden to any other person. On the above basis a clear case has been made out by the appellants and the original authority had verified the facts before grant of refund to the importer-appellants in this case. Therefore the impugned order is contrary to the factual position of the case as discussed herein and on this ground alone it is liable to be set aside. The issue of refund arising on account of payment of duty/tax twice has been dealt with in detail by the by the Hon ble High Court of Gujarat in the case of Swastik Sanitary wares Limited 2012 (11) TMI 149 - GUJARAT HIGH COURT upon taking into account the judgement of the Hon ble Supreme Court in Mafatlal Industries and it was held the assessee is eligible for refund of the amount paid for the second time. Conclusion - i) A refund of customs duty is permissible when it is shown that the duty was paid twice due to an error and the burden of the duty was not passed on to another party. ii) The impugned order is liable to be set aside as it had denied refund to the appellants which has been paid twice towards one single import activity on which customs duty applicable has already been paid at the first time as per law. The impugned order is set aside - appeal allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the Tribunal was whether the appellants, M/s Varian Medical Systems International (India) Private Limited, were eligible for a refund of Rs. 10,25,253/- paid twice as customs duty for the same import transaction under a specific Bill of Entry due to a technical error in the customs software system.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The Tribunal examined the provisions of Section 12 and Section 27 of the Customs Act, 1962. Section 12 governs the levy of customs duties, while Section 27 pertains to the refund of duties. The Tribunal also considered precedents, particularly the judgment of the Gujarat High Court in the case of Swastik Sanitarywares Ltd. and the Supreme Court's judgment in Mafatlal Industries, which addressed the issue of refund of duty paid twice.

Court's Interpretation and Reasoning

The Tribunal interpreted Section 27 to mean that any customs duty paid erroneously, such as in the case of double payment, does not have a legal basis for levy or payment. The Tribunal emphasized that the customs duty for the second payment lacked a taxable event, thereby making the second payment refundable.

Key Evidence and Findings

The Tribunal reviewed the original authority's findings, which included evidence from the State Bank of India confirming the double payment, a chartered accountant's certificate verifying no unjust enrichment, and the customs broker's role in facilitating the payment. The Tribunal found that these documents sufficiently demonstrated that the duty was paid twice for the same Bill of Entry.

Application of Law to Facts

The Tribunal applied the legal framework to the facts by acknowledging that the customs broker acted as an agent for the importer and that the payment of duty was made on behalf of the importer. The Tribunal found that the evidence supported the claim that the duty was paid twice, and the importer bore the burden of the duty without passing it on to others, fulfilling the criteria for a refund under Section 27.

Treatment of Competing Arguments

The Tribunal considered the arguments presented by the Revenue, which contended that the refund was not permissible due to the lack of direct evidence from the importer. However, the Tribunal rejected this argument, stating that the customs broker's involvement and the supporting documentation provided sufficient proof of the double payment.

Conclusions

The Tribunal concluded that the impugned order denying the refund was contrary to the factual and legal position. The Tribunal found that the appellants were entitled to a refund of the amount paid twice as customs duty, as the original authority had correctly determined.

SIGNIFICANT HOLDINGS

The Tribunal held that the impugned order was liable to be set aside, allowing the refund of Rs. 10,25,253/- to the appellants. The Tribunal established the principle that a refund is warranted when duty is paid twice without a legal basis, aligning with the judgments of higher judicial forums.

Core Principles Established

The Tribunal reinforced the principle that a refund of customs duty is permissible when it is shown that the duty was paid twice due to an error, and the burden of the duty was not passed on to another party. The Tribunal also emphasized the role of customs brokers as agents for importers, whose actions and documentation can substantiate claims for refunds.

Final Determinations on Each Issue

The Tribunal determined that the appellants were eligible for a refund of the customs duty paid twice, setting aside the impugned order and allowing the appeal in favor of the appellants.