2025 (8) TMI 417 - AT - Customs

Excess Customs Duty Refund Allowed Under Sections 27 and 28C Despite Self-Assessment Presumption

Pr. Commissioner of Customs (Airport & Admn.) Versus M/s. Zeniak Innovation India Limited

Pr. Commissioner of Customs (Airport & Admn.) Versus M/s. Zeniak Innovation India Limited - TMI ISSUES: Whether a self-assessed Bill of Entry is to be considered as a correctly assessed Bill of Entry, thereby precluding refund claims for excess duty paid.Whether refund of excess Additional Duty of Customs (CVD) is admissible when concessional duty rate was applicable but not claimed at the time of import clearance.Whether the principle of 'unjust enrichment' under Section 27 of the Customs Act, 1962, bars the refund claim without comprehensive verification of sale bills/invoices as mandated under Section 28C.Whether reliance on a High Court judgment, pending appeal before the Supreme Court without stay, is valid for sanctioning refund claims.Whether reliance on a Chartered Accountant's certificate regarding non-passing of duty burden to buyers and accounting treatment of refund claims is sufficient to satisfy the 'unjust enrichment' principle.Whether the decision in a subsequent Supreme Court ruling (post-dating the refund orders) affects the maintainability of refund claims filed without challenging the Bill of Entry assessment. RULINGS / HOLDINGS: On self-assessment: The contention that a self-assessed Bill of Entry is to be considered as a correctly assessed Bill of Entry is 'completely misconceived' and legally not sustainable; refund claims for excess duty paid erroneously are maintainable despite self-assessment.On refund admissibility: Refund of excess CVD paid is admissible where the importer was eligible for a concessional rate under Notification No. 12/2012-CE and related amendments but inadvertently paid higher duty.On unjust enrichment: The issue of 'unjust enrichment' is not applicable where the importer has submitted a Chartered Accountant's certificate confirming that the duty burden was not passed on to buyers and the refund amount is shown as receivable under 'CVD REFUNDABLE' in current assets; reliance on such certificate is an 'established practice'.On reliance on High Court judgment pending Supreme Court appeal: Since no stay was granted by the Supreme Court on the High Court's order, the judgment remains operative and may be relied upon for sanctioning refunds.On documentary requirements under Sections 27 and 28C: Submission of relevant documents including CA certificate, income tax returns, and balance sheets showing refund amounts satisfies the statutory requirements, thereby negating the Department's claim for denial of refund on these grounds.On applicability of later Supreme Court decision: The ratio of the decision holding refund claims without challenging Bill of Entry assessment as not maintainable is not applicable where the refund orders predate that Supreme Court judgment. RATIONALE: The Court applied the statutory framework under the Customs Tariff Act, 1975, and the Customs Act, 1962, particularly Sections 3(1), 27, and 28C, along with relevant exemption notifications.The principle of self-assessment does not preclude correction of errors or refund of excess duty paid, as the purpose of refund provisions is to rectify inadvertent overpayment.The doctrine of unjust enrichment requires that the benefit of excess duty paid not be passed on to the buyer; this is established through documentary evidence such as Chartered Accountant certificates and accounting records.The Court recognized that pending appeals before the Supreme Court without stay orders do not suspend the operation of High Court judgments relied upon by lower authorities.The Court distinguished the present case from later precedent by reference to the timing of the refund orders relative to the Supreme Court ruling, thereby avoiding retrospective application of new legal principles.