Home Case Index All Cases Customs Customs + AT Customs - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 1213 - AT - CustomsRefund of Customs Duty paid - principles of unjust enrichment - expenditure written off while creating the entry as Receivable in the Balance Sheet - whether the appellants have been able to establish that the burden of duty has been passed on, or not? - actual date of provisional assessments - artificial accounting juggleries - HELD THAT:- It is seen that when a person shows any amount as receivables it becomes an asset in the balance sheet. Consequently, the said amount is not passed as expenditure in the profit and loss account. Ledgers are just accounts, the net effect of these accounts is reflected in the final figures in the profit and loss accounts as profit or loss. When a disputed receivable is shown as an asset then the impact of said entry is not passed to P&L account as the expenditure, consequently, the profit in the ‘profit and loss statement’ is enhanced by that amount. In the instant case, the appellant has paid a certain amount of customs duty. Thereafter, the appellant has sought to create an asset in the shape of ‘receivables’ so as to not pass the effect of payment of duty to the profit and loss account. To nullify the effect of the entry ‘receivables’, it has created a parallel entry exactly opposite to the receivables in its ledger as ‘provisions’. The net effect of creating ‘receivables’ and ‘provisions’ on profit and loss and balance sheet is that the customs duty paid is included in expenditure shown in profit and loss account. The legders on the one hand recognizes the disputed amount of customs duty as receivables (an asset) and simultaneously, creates a provision (a liability) for the same amount. These are obviously artificial accounting juggleries as the net combined effect of these two ledger entries in the profit and loss account is that the customs duty gets reflected in the profit and loss as expenditure. The reason why existence of the customs duty as receivables in the balance sheet is considered as evidence of not passing on the burden of customs duty to anybody else is because the said amount shown as receivable is not passed to profit and loss account as expenditure. As soon as a particular amount is charged to expenditure, it is deemed to have been recovered in the shape of the price of the goods. In the instant case, by creating an entry for receivables and thereafter, creating an entry for provision in the ledgers, the appellant has nullified these entries. Consequently, the entire amount of duty paid is passed on as an expenditure to the profit and loss account. Thus the appellant has failed to discharge the burden of unjust enrichment. Both revenue & assessee appeals are dismissed.
|