CA Certificate is Not Enough to Prove Incidence of Duty: CESTAT Remand Matter to Original Authority [Read Order]

In a significant case, the Hyderabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that a CA certificate is not enough to prove the incidence of duty.

Pelican Rubber Lt, the Appellants have filed this Appeal against the Order of the Commissioner of Customs & Central Tax (Appeals-I). The Commissioner (Appeals) vide his impugned OIA has set aside the Order passed by the Original Authority granting them a refund and allowed the Appeal filed by the Department.

The Appellant’s refund claim was rejected and subsequently, the Original Authority granted a refund in the light of the Order passed by this Tribunal vide its Final Order No.A/30131/2017 dated 13.02.2017. However, the Department did not agree with this sanction of refund solely on the ground that the Original Authority has not examined the question of compliance of the Appellant to the principle of unjust enrichment as is required under the provisions of Sec.27(2)(a) & 28D of the Customs Act, 1962.

The Commissioner (Appeals) has, inter alia, held that the Original Authority has not examined the legal requirements i.e., Section 27(2)(a) of the Customs Act, 1962. He also held that under Section 28D of the Customs Act, unless the contrary is proved by the claimant, it is deemed that the burden of duty is transferred to the buyer of the goods.

Further, after going through the submissions of the Appellants and the documents viz., CA Certificate, the Commissioner (Appeals) held that Appellants have failed to submit proper documents to prove that they had not passed on the burden of duty which was sought to be refunded.

The Advocate for the Appellant is primarily relying on the CA Certificate issued by the CA, M/s C. Narayan, wherein, he has certified that they have not passed on the Customs Duty amount of Rs.3,75,756/- to the customer against the Bill of Entry No.6649432 dated 25.04.2012.

On the other hand, the revenue department has reiterated the grounds taken by the Appellate Authority in the OIA and has also pointed out that given the provisions of Sec.28D, unless the contrary is proved the Appellant would be deemed to have passed on the full incidence of such duty

It was evident that the Appellate Authority doubted the bonafide of CA’s Certificate dated 27.02.2017, as it was related to fine and penalty and not duty.

A single-member bench comprising Mr AK Jyotishi, Member (Technical) referred back the matter to the Original Authority to go through the documents furnished by them and any other additional evidence or documents which he might require to conclude whether the principle of unjust enrichment is invokable in the instant case or otherwise. “Merely CA Certificate per se cannot be the sole ground for proving that they have not passed on the incidence of duty if the sanctioning authority is not satisfied with the documents and he may also rely in addition on any other documents to conclude as to whether duty incidence has been passed on to the customer or not in the facts of the case.”, the CESTAT bench held.

To Read the full text of the Order CLICK HERE

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