Case Law Details
Commissioner of Customs (Port) Vs KEC International Limited (CESTAT Kolkata)
Introduction: The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Kolkata recently addressed a crucial aspect in the case of Commissioner of Customs (Port) vs. KEC International Limited. The appeal questioned the order-in-appeal that allowed refund claims filed by the respondent, focusing on the burden of customs duty and the concept of unjust enrichment.
Detailed Analysis: KEC International Limited, an importer of fiber optic cable (DWSM & OPGW), faced a dispute with the Customs Department over the classification of their products. Provisional assessment was carried out, classifying the goods under CTH 90011000 with a 10% customs duty rate. The importer, under protest, paid the duty but later got the goods tested, leading to a conclusion by the Department that the goods were classifiable under CTH-85447090, attracting nil customs duty.
The importer filed refund claims for the 26 Bills of Entry, backed by a Chartered Accountant’s Certificate and a Statutory Auditor’s Certificate, both indicating the amount as due refund of customs duty and not passed on to buyers. The Adjudicating Authority rejected the claim, citing a failure to satisfy the test of unjust enrichment.
The Commissioner (Appeals) upheld the importer’s contention, emphasizing that the amount had been shown as receivables in the Books of Accounts, substantiated by certificates from financial experts. The order also referred to a Supreme Court case highlighting the need for empirical justification and evidence to establish the non-passing of the customs duty burden to buyers.
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