Mere Accounting is not conclusive proof that burden of customs duty has been passed on, has to be empirically justified: CESTAT [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that mere Accounting is not conclusive proof that burden of customs duty has been passed on and hence it has to be empirically justified.

The respondents are importer of fibre optic cable (DWSM & OPGW) and filed 26 Bills of Entry for clearance of the same. At the time of assessment, the dispute regarding classification of the impugned products did arise between the importer and the Department. As a result, provisional assessment of the impugned Bills of Entry were resorted to.

The Department, therefore, classified the impugned goods under CTH 90011000 attracting Customs duty at the rate of 10% adv. The importer paid the duty under protest and also followed it up by formal letter of protest to the Department. The goods were subsequently got tested from Electronic Regional Test Laboratory (ERTL) whereupon the Department concluded that the subject goods were classifiable under CTH-85447090 attracting nil rate of Basic Customs Duty.

The Adjudicating Authority, however, rejected the said refund claim of the respondent herein on the ground the claimant has failed to satisfy the test of unjust enrichment. The Adjudicating Authority has also observed that the importer had not challenged the assessment order in respect of 24 Bills of Entry.

A Two-Member Bench of the Tribunal comprising Ashok Jindal, Judicial Member and Rajeev Tandon, Technical Member observed that “Once they were informed of the test results and for which reasons they had paid the duty at the first instance only under protest. Once certain about the leviability of the imported goods at nil rate of duty, as informed to them by the Department, the respondent has also indicated the same in their books of account. Since the refund amount was contingent upon the outcome of the test report, it is very obvious that the said amount could not be reflected as receivables then and there.”

“Even otherwise, mere accounting is not conclusive proof that the burden of duty has been passed on and has to be empirically justified” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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