Legal principle

A chartered accountant's certificate cannot be ignored when it is supported by invoices and books of account; together they can rebut the Section 28D presumption of unjust enrichment, and the refund must then go to the importer instead of the Consumer Welfare Fund.

Court decision

The Delhi High Court dismissed all five appeals of the department, holding that no substantial question of law arose. The findings of the Commissioner (Appeals) and CESTAT that there was no unjust enrichment were upheld, so the refunds must be paid to Micromax and not to the Consumer Welfare Fund.

Facts

Micromax Informatics Limited imported cellular phones and mobile parts between June 2014 and March 2015 and paid 6% Countervailing Duty (CVD). The Supreme Court in SRF Ltd. held that CVD was not payable on such imports, so Micromax claimed refunds, including Rs.28,48,22,600, Rs.22,48,35,292, Rs.33,91,47,955, Rs.68,11,45,947 and Rs.50,15,32,437. The Commissioner of Customs ordered the refunds credited to the Consumer Welfare Fund under Section 27(2), finding that the duty burden had been passed to buyers (unjust enrichment). The Commissioner (Appeals) on 09.03.2022 reversed this, relying on a chartered accountant's certificate and audited balance sheets. CESTAT upheld that on 26.09.2023. The department filed five appeals in the Delhi High Court.

Key provisions

• Section 28D, Customs Act, 1962 — Presumption that incidence of duty has been passed on to the buyer