2024 (6) TMI 170 - AT - Customs

Refund granted for excess CVD paid under protest with Section 27A interest after unjust enrichment bar lifted

CESTAT Kolkata allowed the appeal for refund of excess duty paid under protest. The appellant had paid CVD at 6% under one notification while being ... Refund of duty paid under protest - rejection on the ground of unjust enrichment - Entitlement to interest for delayed refund. Refund claim on the ground of unjust enrichment - HELD THAT:- It is an admitted fact that the appellant paid the duty under protest at the time of importation of goods and this issue was settled by the Hon’ble Apex Court in the case of M/s SRF Limited [2015 (4) TMI 561 - SUPREME COURT], wherein the appellant opted to pay CVD @ 6% under Notification No.2/2011-CE dated 01.03.2011 under protest though it was eligible for the benefit of Notification No.1/2011-CE dated 01.03.2011 and the appellant has filed refund of excess duty paid during the period 09.05.2015 to 17.06.2015. The appellant has also filed refund claim for the subsequent period i.e. 18.06.2015 to 10.07.2015. Subsequently, the refund claim filed by the appellant for the excess duty paid, was allowed to the appellant holding that the appellant has been able to pass the bar of unjust enrichment. As in the appellant’s own case for identical facts [2013 (4) TMI 467 - CESTAT NEW DELHI], it has been held that the bar of is not applicable to the facts of this case, therefore, we hold that the appellant is entitled for refund claim and has passed the bar of unjust enrichment by providing certificate issued by the Chartered Accountant to that effect and have shown the amount of refund is receivable from the Department which is reflected in the Balance sheet. Admittedly, in this case, the appellant has paid the duty under protest and the duty is payable by the appellant on MRP basis, therefore, relying on the decision of Girish Foods & Beverages Pvt. Limited [2007 (2) TMI 28 - CESTAT, MUMBAI], the appellant is entitled for refund of excess duty paid under protest and bar of unjust enrichment is not applicable - the appellant has been able to pass bar of unjust enrichment. Consequently, the appellant is entitled for refund as claimed. Interest for delayed refund in terms of Section 27A of the Customs Act, 1962 - HELD THAT:- The appellant is entitled to interest of refund claim after three months from the date of filing of refund claim till its realization. The impugned order is set aside - Appeal allowed. Issues Involved:1. Denial of refund claim based on unjust enrichment.2. Compliance with the bar of unjust enrichment for the period 09.05.2015 to 17.06.2015.3. Entitlement to interest on delayed refund.Detailed Analysis:1. Denial of Refund Claim Based on Unjust Enrichment:The appellant's refund claim was initially denied on the grounds of unjust enrichment. The appellant had substantiated their claim with a Chartered Accountant's certificate and showed the amount as receivable in their books of accounts. Despite this, the Ld. Deputy Commissioner denied the refund by an order-in-original dated 17.06.2021. This decision was upheld by the Commissioner (Appeals) in an order dated 29.07.2022, leading to the current appeal.2. Compliance with the Bar of Unjust Enrichment for the Period 09.05.2015 to 17.06.2015:The appellant argued that the issue of unjust enrichment had already been settled in their favor for the subsequent period (18.06.2015 to 10.07.2015) by the Ld. Commissioner (Appeals) of Customs, GST & Central Excise, Patna. The Tribunal noted that the appellant had paid the duty under protest and had not passed it on to their customers, as evidenced by the Chartered Accountant's certificate and the amount being reflected as receivable in the balance sheet.The Tribunal referenced several legal precedents to support this view:- Hero Motocorp Ltd. v. Commissioner of Customs (Import & General): The Delhi High Court held that a Chartered Accountant's certificate forms definitive proof that the burden of excess payment of duty has not been passed on to customers.- Commissioner of Customs, Air Cargo Unit vs Maruti Udyog Ltd.: The CEGAT, Delhi, held that the balance sheet, C.A. Certificate, and unchanged prices of the car were sufficient to prove that the incidence of duty had not been passed on.- Nokia India Sales P. Ltd vs Commissioner of Customs Hyderabad: The CESTAT Hyderabad held that a Chartered Accountant's certificate indicating that the incidence of duty had not been passed on should be accepted in the absence of contrary evidence.The Tribunal concluded that the appellant had successfully passed the bar of unjust enrichment and was entitled to the refund claim. The Tribunal also referenced the case of Girish Foods & Beverages Private Limited, where it was held that the bar of unjust enrichment was not applicable when the duty was paid under protest and on an MRP basis.3. Entitlement to Interest on Delayed Refund:The appellant claimed entitlement to interest on the delayed refund under Section 27A of the Customs Act, 1962, and the decision of the Apex Court in Ranbaxy Laboratories Ltd. Vs. Union of India. The Tribunal held that the appellant was entitled to interest on the refund claim after three months from the date of filing the refund claim until its realization.Conclusion:The Tribunal set aside the impugned order and allowed the appeal with consequential relief, including the refund of the excess duty paid and interest on the delayed refund. The Tribunal's decision was based on the appellant's compliance with the bar of unjust enrichment and the legal precedents supporting their claim.