Refund to Fund - Does Money really go from Customs to Consumer Welfare Fund?
IN a refund claim in Customs, Central Excise or Service Tax, if the assessee does not pass the ‘unjust enrichment test', the refund has to be credited to the 'Consumer Welfare Fund'. A small survey conducted by us revealed that most of the Assistant Commissioners had no clue as to how to credit the refund to the 'Fund'. And some Assistant Commissioners were not even aware of the Fund. Even those officers who are aware of the Law do not credit the refund amounts to the Consumer Welfare Fund.
The CAG's Audit found one such instance. In its latest report to Parliament [Report No. 7 of 2015 (Indirect Taxes-Central Excise)] , the CAG observes,
Section 11B of Central Excise Act provides for grant of refund if duty relating to refund claim was paid by manufacturer and the incidence of such duty had not been passed on by him to any other person. In case the duty incidence had been passed on to any other person, the amount of refund shall be credited to the Consumer Welfare Fund (CWF).
Scrutiny of records in Belapur Commissionerate revealed a long pending refund claim was decided in favour of the assessee in November 2003 and was remanded back to adjudicating authority to ensure whether the refund was to be provided to the assessee or credited to Consumer Welfare Fund. The case was adjudicated by the Assistant Commissioner who ordered (February 2005) the transfer of the amount of refund to the CWF after verifying the correctness of the amount of refund. However, no action had been taken by the Department to credit the amount of Rs. 59.53 lakh to the Consumer Welfare Fund till August 2009 even after a lapse of more than 4 years.
When we pointed this out (August 2009), the department intimated (January 2014), that the amount of Rs.59.53 lakh was transferred to the Consumer Welfare Fund in January 2014.
We observe that even after the lapse was pointed out by CERA in August 2009, there was a delay of more than four years in transferring the amount to the Consumer Welfare Fund .
Shouldn't the Assistant Commissioner who sat over 60 lakhs of rupees meant to be used for consumer welfare, be asked to pay interest for these nine years?