2014 (7) TMI 143 - AT - Customs

Denial of Refund claim - Unjust enrichment - excess duty was paid at time of import - Assessee contends that amount has been shown by them in the balance sheet as receivable and they have produced the certificate from the Chartered Accountant to the effect that the said amount has not formed part of cost of production and is receivable from the department - Revenue contends that appellant has failed to show that the excess duty paid has not formed part of the cost of production - Held that - appellant has produced a certificate issued by the Chartered Accountant certifying that the excess duty paid by them did not form part of the cost of production. It is further proved by the appellant that the price of the finished goods remain same before and after importation of the impugned goods. It is also found the excess duty paid has been shown as receivable in the balance sheet - excess duty paid by them did not form part of the cost of production and they have passed the bar of unjust enrichment. Therefore appellants are entitled for refund - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant imported capital goods, paid duty, and later claimed a refund of excess duty paid. The Commissioner (Appeals) initially allowed the refund, noting the excess duty paid was not part of the cost of production and was shown as receivable in the balance sheet. However, the revenue challenged this decision, arguing that the appellant failed to demonstrate that the excess duty did not form part of the cost of production, leading to the rejection of the refund claim based on unjust enrichment. The appellant, supported by a certificate from a Chartered Accountant, contended that the excess duty did not impact the cost of production, as pre-importation and post-importation prices remained the same.

The Tribunal considered the evidence presented, including the Chartered Accountant's certificate, confirming that the excess duty paid was not part of the cost of production. Additionally, it was established that the prices of finished goods did not change before and after the importation of the goods, and the excess duty paid was reflected as receivable in the balance sheet. Consequently, the Tribunal held that the appellant had met the requirement of unjust enrichment and was entitled to the refund. The appeal was allowed, granting the appellants relief as per the terms outlined in the judgment.