CESTAT rejects delay condonation for cross objections filed years after proper service under Section 153(1)

CESTAT New Delhi rejected the delay condonation application for filing cross objections. The appellant filed cross objections after significant delay, claiming the appeal copy was unavailable in departmental files until receiving a letter in July 2022. However, the tribunal found that notice was properly served on the authorized representative in January 2020 under Section 153(1) of the Customs Act. The department failed to provide satisfactory explanation for the enormous delay in filing cross objections beyond the prescribed 45-day period under Section 129A(4).

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Issues Involved:
1. Delay in filing Cross Objections by the department.
2. Compliance with procedural requirements for filing Cross Objections and Delay Condonation Application.
3. Entitlement of the appellant to a reduced rate of Additional Duty of Customs and refund claim.
4. Doctrine of unjust enrichment and whether the burden of duty was passed on to buyers.

Summary:

1. Delay in Filing Cross Objections:
The department filed Cross Objections on 28.12.2022, accompanied by an application to condone a delay of 977 days. The Tribunal examined whether the delay should be condoned and if the Cross Objections were filed as per the prescribed procedure. The department argued that the delay was due to the unavailability of the appeal copy in the departmental file and cited the Supreme Court's order extending limitation periods due to the COVID-19 pandemic. The Tribunal found that the notice was deemed served on 28.01.2020, and the delay was not satisfactorily explained, rejecting the delay condonation application and dismissing the Cross Objections.

2. Compliance with Procedural Requirements:
The appellant contended that the Cross Objections and the delay condonation application were not filed in accordance with the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982. The Tribunal noted that the Cross Objections were signed and verified by the Deputy Commissioner instead of the Principal Commissioner and lacked specific authorization. However, the Tribunal did not decide on this objection as the delay condonation application was already rejected.

3. Entitlement to Reduced Rate of Additional Duty and Refund Claim:
The appellant imported mobile phones and paid Additional Duty of Customs at 6% but claimed a reduced rate of 1% based on a notification dated 17.03.2012, similar to a condition examined by the Supreme Court in SRF Ltd. The Deputy Commissioner initially sanctioned the refund but directed it to be credited to the Consumer Welfare Fund, citing the appellant's failure to prove that the duty incidence was not passed on to buyers. The Commissioner (Appeals) upheld this decision, stating that the appellant did not conclusively prove the burden of duty was not passed on.

4. Doctrine of Unjust Enrichment:
The Deputy Commissioner and Commissioner (Appeals) both held that the appellant failed to conclusively prove that the incidence of duty was not passed on to buyers. The Chartered Accountant's certificate alone was deemed insufficient without supporting documents. Therefore, the refund claim was considered hit by the doctrine of unjust enrichment, and the sanctioned amount was directed to be credited to the Consumer Welfare Fund.

Conclusion:
The Tribunal rejected the delay condonation application and dismissed the Cross Objections filed by the department. The appeal by the appellant against the order directing the refund to be credited to the Consumer Welfare Fund was not addressed in the summarized judgment.

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