By TIOL News Service

MUMBAI, JAN 30, 2019: REFUND claim filed in respect of the Special Additional Duty was rejected on the ground that the burden of proof of having borne the incidence of 4% of special additional duty on import of 'steel rails' against six bills of entry filed between 29 July 2007 and 10 March 2008 had not been discharged.

The matter is before the CESTAT.

The appellant informs that the sole reason for concluding that burden of duty had been passed on was that the amount claimed was included in 'receivables' only in the balance sheet of 2008-09 which, according to the two lower authorities, implied recovery of the amount from customers in the year of import itself.

The AR justified the order passed by the lower authorities.

After considering the submissions, the CESTAT observed thus -

++ While arriving at the conclusion of having passed on the burden of duty on the premise that inclusion in the 'receivables' head is the unique test, the lower authorities appear to have omitted to consider that a balance sheet is derived from ledger accounts which follow principles of double entry book-keeping.

++ Head 'receivables' can be enhanced, in the present context, only with a reduction in the value of stock of goods. Till then, the duty burden is inherently vested in the goods.

++ Test of exclusion from 'receivables' is meaningless without examining the corresponding entry for goods lying unsold and the logical trajectory of the lower authorities is patently erroneous.

++ It is admitted that all the goods were not sold in the year of import and no evidence is on record to controvert this finding. Accordingly, the inclusion of the said amount in the balance sheet for the financial year 2008-09 suffices to establish that the burden of special additional duty had not been passed on to the buyers in the preceding years.

Concluding that the denial of refund is not correct in law, the impugned order was set aside and the appeal was allowed with consequential relief.

(See 2019-TIOL-337-CESTAT-MUM)