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2013 (3) TMI 214 - AT - CustomsUnjust enrichment - Claim of Refund and Special Additional Duty on the goods imported for subsequent sale as provided under Notification No. 102/2007-Cus. dated 14-9-2007 - Held that - CBEC had clearly stated that in order to fulfill the requirement of the condition that the incidence of duty burden has not been passed on by the importer to any other person for the purpose of refund of 4% CVD certificate given by their statutory auditor should be enough. Bar of unjust enrichment is applicable to the facts of this case when the appellants have filed a refund claim of SAD paid by them at the time of import of goods which were cleared by them on payment of VAT. As the appellants have obtained a certificate from Chartered Accountant confirming that the duty liability of SAD has not been passed on to the buyers by the appellants, the same is sufficient as per the Board s Circular No. 18/2010-Cus., dated 8-7-2010, to discharge the liability of bar of unjust enrichment and the bar of unjust enrichment is not applicable to the case of the appellants. Accordingly, the appellants are entitled for refund claim - in favour of assessee.
Issues Involved:
1. Refund claim of Special Additional Duty (SAD) under Notification No. 102/2007-Cus. 2. Fulfillment of conditions for exemption under Notification No. 102/2007-Cus. 3. Submission of required documents for refund claim. 4. Rejection of refund claim on grounds of unjust enrichment. 5. Acceptance of Chartered Accountant's certificate as proof of non-passing of duty burden. Issue-wise Detailed Analysis: 1. Refund Claim of Special Additional Duty (SAD) under Notification No. 102/2007-Cus.: The appellant, a manufacturer and importer of electronic goods, filed a refund claim of Rs. 12,41,910/- for the 4% Special Additional Duty (SAD) paid at the time of import of air-conditioners. The claim was made under the exemption provided by Notification No. 102/2007-Cus., dated 14-9-2007. 2. Fulfillment of Conditions for Exemption under Notification No. 102/2007-Cus.: Upon scrutiny, it was noted that the appellant failed to meet certain mandatory conditions of the said notification. Specifically, the appellant did not submit necessary documents such as VAT returns, VAT challans, sales invoices, and evidence to substantiate the claim of non-passing of duty burden (unjust enrichment). 3. Submission of Required Documents for Refund Claim: The appellant's refund claim was rejected by the adjudicating authority due to non-submission of documents evidencing payment of appropriate Sales Tax/VAT and failure to prove that the burden of 4% SAD was not passed on to the buyers. This decision was based on the absence of VAT-related documents and the recording of the 4% CVD as an expense in the appellant's balance sheet. 4. Rejection of Refund Claim on Grounds of Unjust Enrichment: The first appellate authority partly allowed the appeal but upheld the rejection on the grounds of unjust enrichment, remanding the matter back for re-examination of VAT/CST payment evidence. The appellant contested this decision, arguing that the authorities did not follow the Board's circulars which state that a Chartered Accountant's certificate should suffice to prove non-passing of duty burden. 5. Acceptance of Chartered Accountant's Certificate as Proof of Non-Passing of Duty Burden: The appellant provided a Chartered Accountant's certificate from M/s. M.M. Raji & Co., their statutory auditors, asserting that the 4% SAD burden was not passed on to the buyers. The appellant cited C.B.E. & C. Circular No. 16/2008-Cus., dated 13-10-2008, and Circular dated 8-7-2010, which clarify that such a certificate should be accepted by the authorities. The Tribunal found that the lower authorities erred in rejecting the refund claim based on the balance sheet entries and not adhering to the Board's circulars. Judgment: The Tribunal concluded that the appellant had sufficiently demonstrated compliance with the conditions for refund under Notification No. 102/2007-Cus. through the Chartered Accountant's certificate. The Tribunal referenced the case of STP Ltd. v. CCE (Import), Mumbai, where a similar issue was resolved in favor of the appellant based on the Chartered Accountant's certificate. Consequently, the Tribunal set aside the impugned orders to the extent challenged and allowed the appeals, directing that the refund claims be processed in accordance with the Board's circulars. Conclusion: The Tribunal's decision emphasized the sufficiency of a Chartered Accountant's certificate in proving non-passing of the 4% SAD burden and criticized the lower authorities for not adhering to the Board's circulars. The appeals were allowed, and the orders rejecting the refund claims were set aside.
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