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2021 (3) TMI 214 - AT - CustomsRefund of SAD - non-collection of excess duty paid by the appellant - credit notes - denial of refund on the ground that the test of unjust enrichment not passed on - rebuttal presumption as per Section 28D of Customs Act - HELD THAT - The certificate of the Chartered Accountant would show that he has examined records and verified as to the details of the refund claim made by the appellant. Further it is also shown that the amount was reflected in the accounts /balance sheet under the head Customs Refund Receivables . This would clearly go to establish that the excess duty has not been passed on to the buyers by the appellant From the discussions made by the original authority and also after perusing the documents enclosed in the appeal there are no hesitation to agree with the decision of the refund sanctioning authority that incidence of customs duty has not been passed on to another. In the case of COMMISSIONER OF CUSTOMS NEW DELHI VERSUS ORGANAN (INDIA) LTD. 2008 (9) TMI 62 - SUPREME COURT similar issue came up for consideration wherein the Hon ble Apex Court held that the assessee had not passed on the burden of the customs duty to its customers. This finding is a finding of fact based on evidence which does not call for any interference. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to refund of Customs duty. 2. Application of the principle of unjust enrichment. 3. Compliance with Sections 28C and 28D of the Customs Act, 1962. 4. Validity of the Chartered Accountant's certificate as evidence. Issue-wise Detailed Analysis: 1. Entitlement to Refund of Customs Duty: The appellant imported 78 BMW cars under 7 Bills of Entry and later discovered an error in the import invoices, leading to an overpayment of customs duty. After the overseas supplier acknowledged the error and issued credit notes, the appellant sought reassessment under Section 149 of the Customs Act, 1962. The reassessment was initially rejected but later accepted upon appeal. The Assistant Commissioner of Customs reassessed the Bills of Entry and confirmed a net refund entitlement of Rs. 9,24,35,784. The refund claim was filed within the stipulated time and was sanctioned by the Assistant Commissioner, who found that the appellant had not passed on the incidence of duty to any other person. 2. Application of the Principle of Unjust Enrichment: The Commissioner (Appeals) rejected the refund on the grounds that the appellant did not show customs duty separately on the sales invoices, invoking the presumption under Section 28D of the Customs Act, 1962, that the duty incidence had been passed on. However, the appellant argued that the presumption is rebuttable and provided several documents, including credit notes, revised invoices, sales invoices, and a Chartered Accountant's certificate, to demonstrate that the excess duty was not passed on to the customers. The original authority had accepted these documents as evidence, but the Commissioner (Appeals) did not. 3. Compliance with Sections 28C and 28D of the Customs Act, 1962: The appellant contended that the sale of cars occurred after the goods were cleared for home consumption, making it impractical to show customs duty on the sales invoices at the import stage. The appellant maintained that the standard sale price to dealers remained unchanged before and after the error, indicating that the excess duty was not passed on. The Commissioner (Appeals) failed to appreciate this context and erroneously focused on the lack of duty indication on sales invoices. 4. Validity of the Chartered Accountant's Certificate as Evidence: The Chartered Accountant's certificate stated that the excess customs duty was not passed on to the buyers and was accounted for as receivable. The original authority had accepted this certificate and other supporting documents, but the Commissioner (Appeals) disregarded it without proving it false. The Tribunal noted that the certificate was issued after examining records and that the excess duty amount was reflected in the appellant's accounts as 'Customs Refund Receivables,' supporting the claim that the duty was not passed on. Conclusion: The Tribunal found that the original authority had thoroughly examined the documents and correctly concluded that the incidence of customs duty was not passed on to another. The Tribunal referenced the Supreme Court decision in CC New Delhi Vs Organan (India) Ltd., which supported the appellant's case. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, affirming the appellant's entitlement to the refund without the bar of unjust enrichment.
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