2014 (11) TMI 614 - AT - Customs

Tribunal reinstates refund for differential customs duty, emphasizing need for conclusive evidence

M/s CENTURY ENKA LTD Versus COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI

The Tribunal set aside the appellate order and reinstated the Dy. Commissioner's decision to grant the refund of Rs. 24,00,891 to M/s Century Enka Ltd. ... Denial of refund claim - exemption under Notification No. 51/86 dated 17.2.1986 - Refund amount sanctioned but ordered to be credit to the consumer welfare fund by invoking the principles of ‘unjust enrichment' - Held that:- In view of the detailed categorical finding recorded by the Dy. Commissioner after examining the various documents on record in addition to the CA's Certificate, the refund has been allowed by a speaking order holding that ‘unjust enrichment' is not attracted in the facts and circumstances of the case. Further, I find that the appellate order is non-speaking order and the refund sanctioning order has been set aside only taking notice of the grounds of appeal without recording or indicating a single finding of the Dy. Commissioner to be perverse. Thus, I set aside the impugned appellate order and restore the order of the Dy. Commissioner dated 20.7.2005 granting refund - Decided in favour of assessee. Issues:Refund claim based on unjust enrichment principle.Analysis:The appeal was filed by M/s Century Enka Ltd. against an Order-in-Appeal passed by the Commissioner of Customs (Appeals), Mumbai. The dispute arose from the import of Spin Finish Oil under Notification No. 51/86. The Tribunal had previously settled the issue in favor of the appellant, leading to a refund claim of Rs. 24,00,891 for the differential customs duty. Initially, the refund was ordered to be credited to the consumer welfare fund due to unjust enrichment concerns. However, after a series of legal challenges and detailed examinations, the Dy. Commissioner of Customs sanctioned the refund based on findings that the duty burden was not passed on to the buyers. The Dy. Commissioner considered various documents, including a Chartered Accountant's certificate, comparative sale price statements, and other relevant records to support the refund decision.The Revenue appealed the refund order, arguing that the Chartered Accountant's certificate alone was not conclusive proof of non-passing of duty burden. The Revenue contended that uniformity in prices before and after import did not definitively prove absence of passing on the duty burden. The Commissioner (Appeals) set aside the refund order, citing precedents and principles related to unjust enrichment, emphasizing the need for conclusive evidence beyond the Chartered Accountant's certificate.The appellant argued that the Chartered Accountant's certificate was submitted as per Revenue's direction and was supported by relevant records. They highlighted Circular No. 18/2010-Cus, which allowed reliance on such certificates for proving non-passing of duty burden. The appellant sought the restoration of the refund order based on the detailed findings of the Dy. Commissioner and the supporting documents.After considering the arguments, the Tribunal found that the Dy. Commissioner had thoroughly examined the relevant documents and issued a speaking order justifying the refund based on the absence of unjust enrichment. The Tribunal noted that the appellate order lacked substantive reasoning and merely relied on the grounds of appeal without challenging the Commissioner's findings. Consequently, the Tribunal set aside the appellate order and reinstated the Dy. Commissioner's decision to grant the refund, ruling in favor of the appellant and providing for any consequential relief.In conclusion, the judgment addressed the issue of unjust enrichment in the context of a refund claim, emphasizing the importance of detailed examination of evidence and supporting documents to determine whether the duty burden was passed on to the buyers. The decision highlighted the significance of a reasoned order based on thorough analysis in such cases.