2017 (9) TMI 1391 - AT - Customs

Refund claim - EPCG scheme - denial of refund on the ground of unjust enrichment - case of Revenue is that the appellants have not established beyond doubt that the said duty paid by them was not recovered from their customers - Held that - the goods imported by the appellant are light and light fittings which are used by them in their hotel for enhancing the beauty and decor. The same are neither sold to any other person nor consumed in the manufacture of any other final products which are ultimately sold to their customers. In such a scenario, the principle of unjust enrichment will not apply. It is not the Revenue s case that the said Chartered Accountant s Certificate does not reflect the correct position. Neither they have been able to produce any evidence so as to cause doubt on the said certificate or to rebut the same - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim under Export Promotion Capital Goods (EPCG) Scheme.
2. Unjust enrichment in refund claim.
3. Interpretation of Chartered Accountant's certificate as evidence.

Issue 1: Refund claim under EPCG Scheme:
The judgment revolves around a refund claim under the Export Promotion Capital Goods (EPCG) Scheme. The respondent imported "light and light fittings" under this scheme but faced a dispute with the Revenue regarding the concessional rate of duty. After a series of litigations, the Tribunal ruled in favor of the respondent, allowing them to claim a refund of the duty initially paid.

Issue 2: Unjust enrichment in refund claim:
The crux of the matter lies in the concept of unjust enrichment concerning the refund claim. The Assistant Commissioner had sanctioned only a partial refund, citing concerns of unjust enrichment as the duty paid might have been passed on to the ultimate consumer. However, the Commissioner (Appeals) overturned this decision based on the Chartered Accountant's certificate provided by the appellant, showing that the excess duty paid was not passed on and was accounted for as receivables/recoverables in the books of accounts.

Issue 3: Interpretation of Chartered Accountant's certificate as evidence:
The Commissioner (Appeals) relied heavily on the Chartered Accountant's certificate to support the refund claim. The certificate confirmed that the duty amount claimed as a refund was not passed on to any customer and was reflected as receivables/recoverables in the appellant's books of accounts. The Commissioner found merit in this evidence, emphasizing that the accounting treatment of the duty amount as receivables was sufficient to establish that the duty incidence had not been passed on to customers.

In conclusion, the judgment upholds the Commissioner (Appeals) decision to allow the refund claim, rejecting the Revenue's appeal. The court reasoned that the goods imported were not sold or consumed in a way that would trigger unjust enrichment concerns. The Chartered Accountant's certificate played a crucial role in establishing that the duty amount was not passed on, as it was properly accounted for in the appellant's books.