2023 (4) TMI 787 - AT - Customs

Refund claim of SAD for the whole of the additional duty of customs paid at the time of import of electronic goods which were subsequently sold in the domestic market with proper sales invoice - Principles of Unjust Enrichment - HELD THAT - M/s. LG Electronics India P. Ltd. has imported goods claiming exemption under Notification No.102/2007-Cus. dated 14.9.2007. As noted by the Commissioner (Appeals), Revenue has not produced any documentary evidence at any stage of the appeals to show that discrepancy exists between the description of goods imported and those sold. The Commissioner (Appeals) is agreed upon that Revenue has not provided evidence to establish the fact as alleged by them and their appeal in this regard fails. Unjust enrichment - HELD THAT - The appeal has stated that the procedure to be adopted for refund of 4% additional duty of customs is given in Board Circular No. 6/2008-Customs (F. No. 401/104/2007-Cus.III) dated 28.4.2008 and Customs Public Notice No. 39/2011 dated 14.6.2011 - As per para 6.2 of the said Board s circular, Statutory Auditors / Chartered Accountants are required to explain how the burden of 4% CVD has not been passed on by the importer and to fulfill the requirements of unjust enrichment. It is found that the certificate of the Chartered Accountant submitted in this case does mention that the aforesaid claim of Rs.43,98,399 is out of Additional Duty of Customs and has been recorded in the books of accounts as Claims Recoverable from Customs Department. There is nothing in the appeal to show that 100% verification of invoices was not done by the Chartered Accountant before submission of the claim. The Boards Circular only requires the statutory auditor/Chartered Accountant who certifies the importer s annual financial accounts under the Companies Act or any statute, to explain how the burden of 4% CVD has not been passed on by the importer and to fulfill the requirement of unjust enrichment - as stated by the respondent, satisfied by the Chartered Accountant s certificate - there are no grounds in the appeal strong enough to prima facie differ from the views of the respondent. Appeal filed by Revenue rejected.

Summary

Issues involved:
The issues involved in this case include discrepancies in the description of goods between the Bill of Entries and sales invoices, the requirement to establish unjust enrichment for refund claims, and the sufficiency of the Chartered Accountant's certificate in proving the non-passing on of duty to buyers.

Discrepancies in Description of Goods:
The case involved a refund claim by a company for additional duty of customs paid on imported electronic goods that were later sold in the domestic market. The Department contested the claim, citing discrepancies in the description of goods between the Bill of Entries and sales invoices. The Department argued that the refund was not claimed on the goods that were actually imported. However, the Commissioner (Appeals) found that the Department failed to provide documentary evidence to support their claim of discrepancies, leading to the dismissal of the Department's appeal.

Unjust Enrichment Requirement:
The Department raised the issue of unjust enrichment, referring to Board Circulars that mandate the examination of this principle for refund claims. The Circular required a certificate from a Chartered Accountant to explain how the burden of duty had not been passed on to buyers. The Department contended that the Chartered Accountant's certificate submitted by the company was vague and did not meet the requirements set out in the Circular. However, the company's counsel argued that the certificate clearly stated that the refund claim was based on duty paid on imported goods that were sold without passing on the duty to buyers. The Tribunal found that the Chartered Accountant's certificate satisfied the unjust enrichment requirement, as it explicitly stated that the duty amount had not been passed on to buyers.

Sufficiency of Chartered Accountant's Certificate:
The Tribunal observed that the Department's appeal lacked specific evidence to challenge the validity of the Chartered Accountant's certificate provided by the company. The Tribunal noted that the certificate, as per the Circular, needed to explain how the duty burden was not transferred to buyers, which the provided certificate did. The Tribunal emphasized the importance of documentary evidence and specific allegations to support claims of non-compliance. Ultimately, the Tribunal rejected the Department's appeal and upheld the order in favor of the company.