Customs Act | Adjudicating Authority Can't Decline Refund Of Excess Duty In Presence Of CA's Certificate: Delhi High Court
The Delhi High Court has made it clear that the Customs authority cannot, in absence of some evidence, decline refund of excess duty paid by a trader when the latter furnishes certificates from a qualified chartered accountant in support of its case.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus dismissed the Department's appeal against Nokia.Nokia sought refund...
The Delhi High Court has made it clear that the Customs authority cannot, in absence of some evidence, decline refund of excess duty paid by a trader when the latter furnishes certificates from a qualified chartered accountant in support of its case.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus dismissed the Department's appeal against Nokia.
Nokia sought refund of excess duty paid on import of mobile handsets. While the goods were exempted by the Central government vide a notification issued in March 2015, Nokia said it had paid additional duty of customs at the rate of 6%.
Though the refund claim was sanctioned, it was directed to be credited to the consumer welfare fund in terms of Section 27(2) of the Customs Act, 1962. This came to be challenged by Nokia.
The company claimed that it had paid excess duty and the same had not been passed on to its consumers. In support of this plea, it filed the certificate of a chartered accountant along with some documents.
The Department however contended that the company did not provide its ledger accounts and CA certificate is not conclusive. It submitted that the burden is on the company to show that the duty was not passed on to the consumers and that refund is liable to be granted.
At the outset, the High Court noted that under Section 27(2), it is purely within the discretion of the Adjudicating Authority to direct crediting of any refund in whole to the Consumer Welfare Fund.
In the present case, it noted that CESTAT had arrived at the conclusion that the CA certificate provided by the company was sufficient.
“There is no reasoning given in support of such payment to the Fund. The only reason given by the Adjudicating Authority is that there is no conclusive proof and that the burden of incidence of duty has not been passed to the consumer,” the Court noted.
It added that in the face of the CA certificate and documents submitted by the company, there has to be some evidence to the contrary that would require the Adjudicating Authority to reject the refund.
“Apart from the documents submitted by the Respondent company along with the chartered accountant's certificate, there may be no other way to prove that the incidence of duty has not been passed on to the consumer, especially, after a lapse of so many years,” Court said.
Under such circumstances, it held the initial burden stands discharged by the company.
As such, it refused to interfere with CESTAT order. However, as the company volunteered, it directed that Rs.25 lakhs be contributed by the company to the Consumer Welfare Fund.
“A sum of Rs.10 lakhs be also contributed to the Delhi High Court Bar Association,” the Court ordered and disposed of the matter.
Appearance: Mr. R. Ramachandran & Mr. Prateek Dhir, Advs for Appellant; Mr. Kamal Sawhney, Mr. Deepak Thackur, Mr. Rishabh Mishra & Ms. Aakansha Wadhwani, Advs for Respondent
Case title: Principal Commissioner Of Customs (ACC Imports) Nokia India Sales Pvt. Ltd.
Case no.: CUSAA 66/2025