2017 (6) TMI 610 - AT - Customs

Refund claim - Education cess and higher education cess on the clean energy cess - Benefit of N/N. 28/2010-CE, and N/N. 29/2010-CE, both dated 26.02.2010 - whether the Appellant became successful in satisfying the authorities that the incidence of duty claimed as refund has been borne by them and not passed on to any other person? - Held that - initially the Adjudicating authority after analyzing the evidences on record, sanctioned the refund, observing that the Appellant could satisfy that the burden of duty has not been passed on to any other person. However, on an appeal by the Revenue, the learned Commissioner (Appeals) arrived at an altogether different finding on which was not communicated to the appellant to explain/rebut the same by material particulars - In these circumstances, the appellant should be given a fair chance to explain the said objection/finding of the learned Commissioner (Appeals) - appeal allowed by way of remand.

Issues:
1. Refund claim based on provisional assessment.
2. Burden of duty claimed as refund.
3. Treatment of duty amount as expenditure.
4. CA certificate and balance sheet as evidence.
5. Fair opportunity to explain objection.

Refund Claim Based on Provisional Assessment:
The case involved the import of steam coal, provisionally assessed with education cess and higher education cess without the benefit of Exemption Notifications. The appellant filed a refund claim after succeeding in an appeal against the assessment order. The issue was whether the refund amount, due in a subsequent financial year, should be considered as receivable in the balance sheet.

Burden of Duty Claimed as Refund:
The central issue was whether the appellant demonstrated that the burden of duty claimed as a refund was borne by them and not passed on to any other person. The appellant provided a CA certificate and audited balance sheet for the financial year 2011-12, showing the refund amount as receivable. The Adjudicating authority initially accepted this evidence, but the learned Commissioner (Appeals) arrived at a different conclusion without allowing the appellant to explain or rebut the findings.

Treatment of Duty Amount as Expenditure:
The learned Commissioner (Appeals) considered the duty amount paid in the financial year 2010-11 as an expenditure, treating it as a cost of goods and suggesting that the burden of the duty claimed as a refund had been passed on to customers. This decision was based on the absence of the refund amount being shown as receivable in the balance sheet for the financial year 2010-11.

CA Certificate and Balance Sheet as Evidence:
The appellant presented a CA certificate from their statutory auditor and an audited balance sheet for the financial year 2011-12 to support their claim that the burden of duty was not passed on to customers. However, the learned Commissioner (Appeals) disregarded this evidence, leading to a challenge by the appellant regarding the validity of the decision.

Fair Opportunity to Explain Objection:
The appellate tribunal found that the appellant should have been given a fair chance to explain the objection raised by the learned Commissioner (Appeals) regarding the treatment of the refund amount. The tribunal allowed the appeals by remanding the case back to the Commissioner (Appeals) with directions to provide the appellant with a reasonable opportunity to clarify their position on the issue.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the tribunal's decision, providing a comprehensive understanding of the legal reasoning and implications involved in the case.

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