The Karnataka High Court has dismissed a customs appeal filed by the department, reaffirming that a certificate issued by the importer’s statutory Chartered Accountant is sufficient to rebut the statutory presumption of unjust enrichment in customs refund cases. 

The bench of Justice S.G. Pandit and Justice Dr. K. Manmadha Rao has observed that where the Chartered Accountant certifies that the incidence of duty has not been passed on to buyers, such certification satisfies the legal requirement under the Customs Act in the absence of any contrary evidence.

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The respondent company, engaged in the import and trading of mobile phones, had imported mobile phones under the relevant Customs Tariff Heading through 15 Bills of Entry. At the time of import, it paid the full Countervailing Duty (CVD) instead of availing a concessional rate because the prescribed conditions for the concession were not fulfilled. Subsequently, the importer claimed that excess CVD had been paid and filed two refund applications seeking repayment of the excess duty. 

When the refund applications were not considered by the customs authorities, the importer approached the Karnataka High Court through writ proceedings. Pursuant to the High Court’s directions, the authorities examined the claims but ultimately rejected them through Orders-in-Original. Aggrieved by the rejection, the importer preferred appeals before the Commissioner of Customs (Appeals). 

The Commissioner (Appeals) concluded that the importer was otherwise entitled to the refund but remanded the matter for verification of invoices and examination of whether the doctrine of unjust enrichment barred the refund. Specifically, the adjudicating authority was directed to sanction the refund only if it was established that the burden of duty had not been passed on to customers. 

The importer challenged the remand order before the CESTAT. The Tribunal held that the Chartered Accountant’s certificate produced by the importer sufficiently demonstrated that the incidence of duty had not been passed on to buyers. Observing that there was no valid reason to disregard the certificate, the Tribunal allowed the appeal and set aside the order requiring further verification. 

The Commissioner of Customs carried the matter to the Karnataka High Court under Section 130 of the Customs Act, 1962, contending that the Tribunal had erred in accepting the Chartered Accountant’s certificate as adequate proof against unjust enrichment. 

During the hearing, however, the importer relied upon an earlier Division Bench decision of the Karnataka High Court in Customs Appeal No. 9 of 2024, decided on September 23, 2025, involving identical circumstances. That judgment had already settled the legal position regarding the evidentiary value of Chartered Accountant certificates in such refund claims. 

The Division Bench noted that Section 28D of the Customs Act creates only a rebuttable presumption that the incidence of duty has been passed on by the importer. The Court observed that neither the statute nor the applicable CBIC circulars prescribe any rigid method for rebutting this presumption.

Referring to its earlier precedent, the Court reiterated that a certificate issued by the Chartered Accountant responsible for certifying the importer’s annual accounts, confirming that the duty burden had not been passed on to customers, is sufficient to discharge the statutory presumption of unjust enrichment. The Court also observed that the circulars governing refund claims do not contemplate any additional evidentiary requirement beyond such certification. 

Finding the controversy to be squarely covered by its earlier judgment, the Karnataka High Court respectfully followed the precedent and dismissed the Revenue’s appeal. As a result, the CESTAT’s order allowing the refund claim on the basis of the Chartered Accountant’s certificate was allowed to stand.

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