Apple Wins
Unjust enrichment - Rebuttable Presumption
THIS is not about Apple's new iPhone 6 which was released yesterday, not about the Apple Watch coming soon. In technology Apple may be a leader, but that kind of technology does not work with Indian Customs.
Apple India Pvt. Ltd. filed a refund claim for an amount totalling to Rs. 5,22,27,424/- being the 4% on the Special Additional Duty (ADC/SAD), paid while importing goods. The adjudicating authority after considering the said claim of refund rejected the same on the grounds that the assessee has failed to prove that they had not passed on the incidence of duty to the customers or any other person and also on the ground that they have not furnished required documents in relation to refund claims.
Apple approached the Commissioner of Customs (Appeals) who held that the assessee Apple is entitled for refund and accordingly, allowed the appeal.
Aggrieved by the same, the Revenue preferred an appeal to the CESTAT. The Tribunal held that audit report shows that the burden of duty has not been passed on either directly or indirectly to the domestic customers. While coming to the conclusion, the auditors have taken into account how the price of traded goods have been arrived at and therefore, the Tribunal was of the view that no interference is called for and dismissed the appeal.
The Revenue is aggrieved and is before the High Court.
The High Court observed,
Section 28 D of the Act states that there arise a presumption that the incidence of duty has been passed on to the customers. It also states that every person who has paid the duty on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods.
Therefore, it is clear that it is rebuttable presumption. To rebut such presumption, the assessee has produced auditor report required to claim the refund of special additional duty. The auditor has unequivocally stated in his report that the burden has not been passed on directly or indirectly and in coming to such conclusion, they have taken into account how the price of the traded goods has been arrived for this purpose.
Therefore, such presumption stands rebutted.
The High Court found no merit in the appeal and dismissed it.
Apple India is richer by over Rs. 5 Crores, but this amount is pending for more than five years and it seems that subsequent refund claims have also been kept pending in view of the pending appeal.
We don't know whether the Commissioner will accept this order of the High Court or go to the Supreme Court.
Revenue officers should remember that delayed refunds cost the government interest.
We bring you this order of the High Court today.