2018 (1) TMI 763 - AT - Customs

Refund of excess duty paid - denial on the ground of unjust enrichment and non compliance of provisions of Sec. 27(ii) of the CA, 1962 - Held that - The Adjudicating Authority in the OIO has accepted the fact that the a refund claim is filed by the appellant is correct in so far as the quantum is concerned as it is arising out of finalization of the Bills of Entry - on plain reading of the CA certificate which is reproduced in the Adjudication order it is noticed that the said CA specifically records that based on the examination of the books of accounts of the respondent they have come to a conclusion that the amount of refund claim of ₹ 3,69,633/- in the case in hand has been shown as amount receivables - the First Appellate Authority was correct in setting aside the OIO. Appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claim based on unjust enrichment and non-compliance of Sec. 27(ii) of Customs Act, 1962.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner of Customs rejecting a refund claim of ?3,69,633 made by the respondent for an amount paid in excess during the assessment of Bills of Entry. The Adjudicating Authority rejected the refund claim citing unjust enrichment and non-compliance with Customs Act provisions. The First Appellate Authority, however, concluded that unjust enrichment did not apply as the excess payment was recorded as receivable in the respondent's books of account.

The Revenue argued that the First Appellate Authority misunderstood the case, emphasizing that the Chartered Accountant's certificate did not provide confidential annexures and did not clearly show that the amount was not passed on to purchasers. Reference was made to a previous case where a similar matter was remanded back to the Adjudicating Authority.

On the other hand, the respondent's Counsel highlighted the findings of the First Appellate Authority and the details in the Adjudicating Authority's Order in Original. They pointed out that the certificate indicated the refund claim amount as receivable in the books of accounts and referenced a previous case where a similar situation was resolved in their favor.

After considering both arguments, it was found that the refund claim arose from the finalization of Bills of Entry initially assessed provisionally. The Adjudicating Authority accepted the correctness of the refund claim quantum and did not reject the Chartered Accountant's certificate. The First Appellate Authority's decision to set aside the Order in Original was supported by the fact that the refund amount was shown as receivable in the books of accounts, as per the CA certificate.

The Tribunal noted that the Revenue's argument for unjust enrichment was not applicable in this case, as the pricing mechanism for petroleum products was controlled by the government, and the duty burden did not pass on to the purchasers. The Tribunal also distinguished a previous case cited by the Revenue, stating that the circumstances were different. Consequently, the appeal by the Revenue was deemed meritless, and the impugned order rejecting the appeal was upheld.