No evidence proves Unjust enrichment, Refund of Excess Paid Duty must be Credit to Consumer Welfare Fund: CESTAT [Read Order]

The Hyderabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)has held that refund of excess paid duty must be credited to the consumer welfare fund in the absence of evidence to prove unjust enrichment.

The Appeals were filed by the Department against the order passed by Commissioner (Appeals-I), whereby the Commissioner (Appeals-I) allowed the Appeals filed by the defendants, Sachdev Overseas Fitness Pvt Ltd and Nityasach Fitness Pvt Ltd.

The question before the Tribunal was, whether the refund claim filed by Respondents for a refund of Customs Duty paid in excess hit by the bar of unjust enrichment and whether the refund amount is liable to be granted to the Appellants instead of crediting the same to the Consumer Welfare Fund as held by the Commissioner (Appeals).

Unless the amount is shown as receivables, it has to be presumed that the incidence of duty was passed on to their customers, and since they have claimed the same as “expenditure” in their Profit & Loss account and failed to recognize the refund as duty receivables for the said period in their Books of Account, the refund claim cannot be presumed to have passed the test of unjust enrichment.

The provisions under Section 27(1A), inter alia, require that the refund application has to be accompanied by such documentary or other evidence (including documents referred to in Section 28C) as the applicant may furnish to establish that the amount of duty or interest, about which such refund is claimed was collected from, or paid by him and the incidence of such duty or interest, has not been passed on by him to any other person.

The Respondents were required to give clear evidence to the sanctioning authority that they had not collected the duty or had only partially collected the duty instead of full duty by way of any relevant document.

A single-member bench comprising Mr A K Jyotishi, Member (Technical) viewed that in the absence of any evidence, merely producing a CA certificate would not suffice to shift the burden of presumption for Section 27 read with Section 28C of the Customs Act.

The bench set aside the Order of the Commissioner (Appeals) and restored the Order of the Original Authority.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates