Circular No. 07/2008-Cus dated 28.5.2008
Sanction of Customs duty refunds - Unjust Enrichment - reg.
While reviewing a case of a refund arising out of an appellate order of the
regional Bench of the Tribunal, it was found that a Assistant Commissioner of
Customs had passed an order of refund sanctioning the refundable amount but
crediting the same to Consumer Welfare Fund without going through the due
process as provided in Section 27 of the Customs Act, 1962 and not looking into
details of the materials on record to deny the refund to the assessee, on the
grounds of unjust enrichment.
2. As may be observed, in terms of sub-section (2) of section 27, the concerned
AC / DC of Customs has to go through the facts of the case and the material
placed before him in order to determine whether the amount claimed by an
applicant is refundable to him or not. Further, in terms of the first proviso to
the aforesaid sub section, the AC/DC should go through the details of audited
balance sheet and other related financial records, certificate of the Chartered
Accountant etc., submitted by the applicant in order to decide whether the
applicant had not passed on the incidence of the duty and interest thereon, if
any, to any other person. The Order-in-Original passed by the AC/DC in the
adjudication process should be a speaking order providing specific details
including the relevant financial records that are relied upon to arrive at a
conclusion whether the burden of duty or interest, as the case may be, has been
passed on or not. Refund orders issued in a routine and casual manner thereby
sanctioning the amount but crediting the same to the Consumer Welfare Fund
without going through the factual details of the case and the due process as
provided in the first proviso cannot be considered as a complete and speaking
order.
3. I am, accordingly, directed to request you to instruct the officers working
under your jurisdiction to carefully examine this aspect of the refund claim
before passing an Order-in-Original, so that unnecessary hardships caused to the
applicants and protracted litigation in claiming refunds is avoided.
F.No.401/46/2008-Cus-III (Aseem Kumar)
Under Secretary (Customs)
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