Legal principle

Once an importer's CA certificate and supporting invoices establish that the incidence of CVD was not passed on to customers, unjust enrichment under Section 28D read with Section 27 is not invokable, and refund cannot be denied merely because the refund amount was not shown as recoverable in a balance sheet for a period before the refund claim was filed.

Court decision

The writ petition was allowed in favour of Yu Televentures: the maintainability objection was rejected, and Respondent No. 4 was directed to grant the refund for the claims at serial Nos. 1 to 3 (imports of 27-31 March 2015) together with interest, to be paid directly to the Petitioner's account within three weeks, there being no valid justification for denying the refund.

Facts

Yu Televentures Pvt. Ltd., a seller of mobile phones and accessories, imported handsets, parts, components and back covers between 27 March 2015 and 9 July 2015, filing 46 Bills of Entry on which it paid CVD at 12.5% while claiming eligibility for concessional rates under Notifications 12/2012-CE and 1/2011-CE (as amended) in the light of the Supreme Court decision in SRF Ltd. It filed Form-102 refund claims for excess CVD of Rs. 21,93,87,645 said to arise under Section 3(1) of the Customs Tariff Act, 1975, supported by a CA certificate that the duty burden had not been passed on to customers. The Department issued memoranda doubting the CA certificate as a rebuttal of unjust enrichment, and by the impugned order dated 22 January 2017 the Assistant Commissioner (Refund) rejected the refund claim for B/Es between 27 and 31 March 2015 as hit by unjust enrichment because the refund was not shown as recoverable in the balance sheet for the year ended 31 March 2015, while crediting the April-July 2015 claims by RTGS without interest.

Key provisions

• Section 3(1), Customs Tariff Act, 1975 — Levy of additional duty equal to excise duty, sales tax, local taxes and other charges
• Section 28D, Customs Act, 1962 — Presumption that incidence of duty has been passed on to the buyer
• Section 27, Customs Act, 1962 — Claim of refund duty