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2017 (7) TMI 320 - AT - CustomsUnjust enrichment - refund claim - whether the refund which was sanctioned by the original authority and credited into Consumer Welfare Fund is hit by unjust enrichment or otherwise? - Held that - the most important evidence produced by the respondent is the sale invoice of the imported goods which was sold @ of ₹ 90/- per kg. whereas the total cost of importation comes to ₹ 314/-per kg. which shows that the duty incidence has not been passed on. The respondent also submitted the Chartered Accountant certificate and also the Balance Sheet which shows that the amount refundable is accounted for under the group head of current asset. With these two evidences, I am of the view that proof that the incidence of duty has not been passed on is clearly established - refund allowed - appeal dismissed - decided against Revenue.
Issues Involved:
1. Whether the refund sanctioned by the original authority and credited into the Consumer Welfare Fund is hit by unjust enrichment. Issue-wise Detailed Analysis: 1. Unjust Enrichment and Refund: The primary issue in this case revolves around whether the refund sanctioned by the original authority and credited into the Consumer Welfare Fund is affected by unjust enrichment. The Revenue argued that the respondent failed to provide satisfactory evidence that the incidence of duty was not passed on to the buyer. They relied on the case of A.K. Enterprise Vs. Commissioner of Customs (Port), Kolkata to support their stance. Evidence Submitted by Respondent: The respondent provided several documents to demonstrate that the incidence of duty was not passed on, including: - Sale invoice showing the imported goods sold at ?90 per kg, while the total cost of importation was ?314 per kg. - Chartered Accountant certificate and Balance Sheet indicating the refundable amount accounted for under current assets. Commissioner (Appeals) Findings: The Commissioner (Appeals) found that the evidence provided by the respondent, such as the sale invoice, Chartered Accountant certificate, and Balance Sheet, clearly established that the duty incidence was not passed on. The Commissioner (Appeals) detailed various documents submitted by the respondent, including: - Debit note for purchase of advance license. - Commercial invoice for import. - Test Bond showing value of goods. - Various receipts and invoices related to importation costs. - Affidavit and court orders regarding unjust enrichment. - Balance sheet and Chartered Accountant certificate showing customs duty as recoverable under current assets. Analysis of Submitted Documents: The Commissioner (Appeals) analyzed these documents and concluded that the respondent sold the goods at a price significantly lower than the landed cost, indicating that the duty burden was not passed on to the buyer. The Commissioner (Appeals) also noted that doubts raised by the original authority regarding the authenticity of the sale transaction and documents remained in the realm of suspicion without concrete evidence to the contrary. Legal Precedents: The Commissioner (Appeals) referred to several judgments, including: - Picasso Exports Vs. Commissioner of Customs (ACC), Chennai. - Bombay Trading Co. Vs. Commissioner of Customs, Cochin. - Commissioner of Customs, Air Cargo Unit, New Delhi Vs. Maruti Udyog Ltd. These cases supported the view that when goods are sold at a loss or when the duty burden is not passed on to the buyer, unjust enrichment does not apply. Final Decision: The Appellate Tribunal upheld the findings of the Commissioner (Appeals) and concluded that the incidence of duty had not been passed on by the respondent. Therefore, the refund was ordered to be given to the respondent along with interest at 6% per annum from the date of payment till the date of refund, as specified by the Hon'ble High Court. The Tribunal dismissed the Revenue's appeal, finding no infirmity in the order of the Commissioner (Appeals). Conclusion: The Tribunal's decision emphasized that the respondent had successfully demonstrated through substantial evidence that the duty incidence was not passed on to the buyer, thereby negating the claim of unjust enrichment and entitling the respondent to the refund.
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