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Custom, Excise & Service Tax Tribunal · 24 Dec 2019
New Delhi vs U T Electronics Pvt Ltd
Legal principle
Under Section 28D of the Customs Act, 1962 the presumption that the duty incidence was passed on is rebuttable, and merely showing the duty as recoverable in the profit and loss account does not prove unjust enrichment — the onus lies on the Department to prove passing on, and an unrebutted Chartered Accountant's certificate suffices to rebut the presumption.
Court decision
The Tribunal upheld the Orders-in-Appeal of the Commissioner (Appeals), decided the questions in favour of the assessee-respondents, and dismissed the Department's stay applications and appeals, so that the refunds (including the portions earlier directed to the Consumer Welfare Fund) remain payable to the assessee.
Facts
M/s U.T. Electronics Pvt. Ltd. imported mobile phones and, at clearance, paid Additional Customs Duty (CVD) at 12.5% under Section 3(1) of the Customs Tariff Act, 1975, although Sl. No. 263A with condition No. 16 of Notification No. 12/2012-EX (as amended after the SRF Ltd. Supreme Court judgment of 26.03.2005) required CVD at only 1%. It filed three refund claims on 24.09.2015 for the differential CVD, covering 15 Bills of Entry. The adjudicating authority sanctioned the refunds but credited portions of them to the Consumer Welfare Fund, holding the unjust-enrichment test under Section 28D, Customs Act, 1962 was not met because the amounts were not shown in the balance sheet as receivable from the Government. The Commissioner (Appeals) set aside the Consumer Welfare Fund credit and directed payment of the refunds to the assessee. The Department, after a review order dated 10.07.2019, appealed to the Tribunal against those Orders-in-Appeal.
Key provisions
- Section 28D, Customs Act, 1962 — Presumption that incidence of duty has been passed on to the buyer
- Section 28C, Customs Act, 1962 — Price of goods to indicate the amount of duty paid thereon
- Section 3(1), Customs Tariff Act, 1975 — Levy of additional duty equal to excise duty, sales tax, local taxes and other charges
- Section 27, Customs Act, 1962 — Claim of refund duty