2017 (7) TMI 11 - HC - Customs

Unjust enrichment - refund claim - Whether the Honourable Tribunal is right in holding that chartered accountant certificate is not conclusive evidence ignoring the fact that the appellant company produced not only the chartered accountant s certificate but also the profit and loss account and balance sheet to establish that there was no unjust enrichment if the refunded amount is paid to the appellant company? - rebuttal of presumption - section 28 - Held that - It is well-settled that the transaction adverted to in a ledger or in a Balance Sheet can only, at best, be a secondary evidence. The primary evidence would be the underlying documents, such as Bills, Sales Invoices, etc. In so far as the entries in the books of accounts and ledgers are concerned, they do not get proved by themselves even those entries require proof - in the opening paragraph of the Chartered Accountant s certificate, seems to indicate that the books of accounts and the relevant supporting documents have been verified. If, that was the position, then, we see no reason why the Assessee could not produce the relevant invoices, i.e., supporting documents before the Tribunal, despite opportunity having been given, in that behalf - appeal dismissed - decided in favor of Revenue.

Summary

Issues involved:
1. Rebuttal of presumption under Section 28-D of the Customs Act, 1962.
2. Consideration of primary evidence in tax refund cases.

Issue 1: Rebuttal of presumption under Section 28-D of the Customs Act, 1962:
The case involved the question of whether the Assessee had successfully rebutted the presumption under Section 28-D of the Customs Act, 1962, which states that unless proven otherwise, the duty paid is deemed to have been passed on to the buyer. The Assessee sought a refund of duty amounting to &8377; 18,91,127, which was initially refused but later sanctioned after reassessment. The Assessee argued that the statutory presumption was rebutted by providing a Chartered Accountant's certificate, balance sheet, and ledger account. However, the court held that these documents were not primary evidence and did not sufficiently rebut the presumption. The court emphasized the importance of primary documents such as sales invoices in proving the passing on of duty burden to customers.

Issue 2: Consideration of primary evidence in tax refund cases:
The court highlighted the significance of primary evidence, specifically sales invoices, in tax refund cases. It was noted that the Chartered Accountant's certificate, balance sheet, and ledger account presented by the Assessee were not considered as primary evidence to rebut the statutory presumption under Section 28-D. The court referenced previous judgments to support the requirement of primary documents for shifting the burden of proof onto the Revenue. The court differentiated the case at hand from precedents where primary documents like self-attested invoices were crucial in establishing the passing on of duty burden. Ultimately, the court dismissed the appeal, ruling in favor of the Revenue due to the lack of primary evidence presented by the Assessee, with no order as to costs.

In conclusion, the judgment focused on the importance of primary evidence, specifically sales invoices, in tax refund cases to rebut statutory presumptions under the Customs Act, 1962. The court emphasized that documents like Chartered Accountant's certificates and balance sheets are secondary evidence and may not suffice to shift the burden of proof onto the Revenue. The decision highlighted the necessity of providing primary documents to support claims in tax refund cases, ultimately leading to the dismissal of the appeal in favor of the Revenue.