Refund of excess additional customs duty: limitation not attracted after HC remand; refund allowed as no unjust enrichment

Claim for refund of excess additional customs duty was examined on limitation and unjust enrichment. The Delhi HC had remanded the matter and rejected the Revenue's limitation plea, obliging lower authorities to decide on merits; consequently the refund sanction was upheld. On unjust enrichment the tribunal held that absence of evidence showing duty was passed on to customers, and the consistency of a Chartered Accountant's certificate with the balance sheet and P&L, sufficed to negate passing-on; the Revenue failed to rebut or produce contrary documentation. The Revenue's appeal was dismissed and the refund sustained.

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Issues Involved:
1. Limitation
2. Unjust enrichment

Summary:

Limitation:
Revenue filed an appeal challenging the order dated 21.03.2022 by the Commissioner of Customs (Appeals), which upheld the Assistant Commissioner's decision to sanction a refund to the respondent. The respondent, a Private Limited Company importing and selling mobile phones in India, had paid additional duty of customs under protest. Following the Supreme Court's ruling in SRF Limited Vs. Commissioner of Customs, the respondent filed a refund claim on 24.06.2016 for the excess additional duty paid between 26.03.2015 to 22.06.2015. The Assistant Commissioner initially rejected this claim, but the Delhi High Court later ruled in favor of the respondent, directing the refund application to be decided on its merits. The Assistant Commissioner subsequently sanctioned the refund, which was upheld by the Commissioner (Appeals). Revenue argued that the refund was time-barred under Section 27(2) of the Customs Act, as it was filed beyond the one-year limitation period. However, the High Court had already addressed and dismissed this limitation argument, compelling the Assistant Commissioner and Commissioner (Appeals) to follow the High Court's order.

Unjust Enrichment:
Revenue also contended that the refund claim was subject to unjust enrichment, arguing that the importer had indicated the amount paid as duty under Section 27. The respondent countered this by submitting a self-declaration and a Chartered Accountant's certificate from M/s Naveen Associates, confirming that the excess amount was not passed on to consumers. The balance sheet for FY 2015-16 listed the excess duty as a receivable under "customs duty refund receivable." The Commissioner (Appeals) noted that the Chartered Accountant's certificate was valid, and the duty was not passed on to buyers. Revenue challenged the credibility of the Chartered Accountant's certificate, asserting that M/s Naveen Associates were not the statutory auditors. However, the respondent maintained that they were the statutory auditors during the relevant period. The Tribunal found no evidence from Revenue to disprove the Chartered Accountant's certificate or to establish that the duty was passed on to buyers. The Tribunal concluded that the refund was not hit by unjust enrichment.

Conclusion:
The Tribunal dismissed the Revenue's appeal, emphasizing that the Assistant Commissioner and Commissioner (Appeals) correctly followed the Delhi High Court's order. The Tribunal found no merit in Revenue's arguments regarding limitation and unjust enrichment, thereby upholding the refund to the respondent.

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