2012 (12) TMI 355 - AT - Customs

Refund - unjust enrichment Held that - Certificate from the Chartered Accountant submitted by the appellants merely states that the extra duty has been accounted in the Profit and Loss Account and in the Balance Sheet - extra duty burden has been booked under the expenditure column and in the Balance Sheet does not show the extra duty amount as receivable from the department - extra duty burden has been absorbed in the cost of the output and the same has been passed on as part of the price of the goods -uniformity in price before and after assessment does not lead to inevitable conclusion that incidence of duty has not been passed on to buyer as such uniformity may be due to various factors refund claim rejected

Summary

Issues:
1. Refund denied on grounds of unjust enrichment.
2. Application of principles of unjust enrichment.
3. Interpretation of the concept of passing on extra duty burden to customers.
4. Examination of evidence provided by the appellants.
5. Analysis of the Chartered Accountant's Certificate.
6. Consideration of the decision of the Hon'ble Supreme Court in CCE, Mumbai Vs. Allied Photographics India Ltd.

Analysis:
The appellants were denied a refund of the extra duty paid due to unjust enrichment. The Ld. Counsel argued that unjust enrichment was wrongly applied as the price of the product remained the same, the extra duty was booked under expenditure, invoices did not reflect extra duty recovery, and a Chartered Accountant's Certificate was produced. The Ld. JCDR countered, stating that a constant output price did not prove the duty was not passed on. He referenced a Supreme Court decision. He argued that booking the duty as expenditure indicated inclusion in product pricing. He disagreed with the appellants' contentions and supported the lower appellate authority's decision, noting the duty was not shown as receivables in the Balance Sheet.

The judge found that a consistent output price did not negate passing on the extra duty burden. The Certificate only mentioned accounting treatment, not non-passing of duty. The duty was booked under expenditure, not shown as receivable. The judge concluded the burden was absorbed in output cost and passed on in goods pricing. Citing the Supreme Court decision, the judge noted price uniformity did not disprove passing on due to various factors. The appellate authority's well-reasoned decision was upheld, and the appeal was dismissed.