CESTAT AHMEDABAD Upholds Decision in M/s. Devi Synthetics Refund Claim Case

The Appellate Tribunal CESTAT AHMEDABAD upheld the decision in favor of M/s. Devi Synthetics in a case concerning a refund claim under the Compounded Levy system. The tribunal found that the lower authorities appropriately considered the evidence presented, including a Chartered Accountant's certificate and the method of duty payment based on fixed annual capacity, to support the refund claim. It was determined that there was no unjust enrichment as the duty liability had not been passed on to customers. The Revenue's appeal was dismissed, affirming the decision in favor of M/s. Devi Synthetics.

---

---

M/s. Devi Synthetics paid duty under a compounded levy determined by annual capacity under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. A refund claim was allowed by the adjudicating authority and Commissioner (Appeals) on the basis that duty was not paid consignment-wise but on the basis of annual capacity and supported by a Chartered Accountant's certificate certifying that the duty element had not been passed on to customers. Revenue argued that the statutory hurdle of "unjust enrichment" must be overcome even in compounded levy cases, relying on precedents requiring proof that the burden of duty was not passed to the buyer. The Tribunal held the procedure adopted by the lower authorities permissible where the "duty element is not reflected in the invoice" and the CA certificate plus annual-capacity basis sufficed to dispel unjust enrichment concerns. The appeal by Revenue was rejected.

---