The High Court of Delhi has dismissed five appeals filed by the Principal Commissioner of Customs , definitively ruling that Micromax Informatics Limited is entitled to the refund of countervailing duty (CVD) payments totaling approximately ₹175 crore. The bench, comprising Justice Avneesh Jhingan and Justice Shail Jain, concluded that the company successfully demonstrated that the financial burden of these duties was not passed on to consumers, thereby negating the department's claims of unjust enrichment .

The dispute originated from the company’s import of cellular phones and mobile components between June 2014 and March 2015 . During this period, the respondent had self-assessed and paid CVD on its imports. Following a landmark judgment by the Supreme Court of India in the case of SRF Ltd. v. Commissioner of Customs, Chennai , which clarified that CVD was not legally payable on such goods, the company filed a series of refund applications. Although the initial adjudicating authority sanctioned these refunds, the department ordered the funds to be deposited into the Consumer Welfare Fund, alleging that the company had recouped these tax costs from its end customers.

This judicial determination marks a significant end to a protracted procedural battle. The First Appellate Authority had originally set aside the order of the adjudicating authority , finding that the department had improperly dismissed the company’s evidence. When the Customs Department subsequently elevated the matter to the Customs, Excise and Service Tax Appellate Tribunal , that forum also rejected the department's arguments, finding that the evidence provided by Micromax was sufficient to prove its claim. The High Court, in its October 2026 judgment, has now affirmed these earlier findings.

Evidence of Financial Non-Pass-Through

The central legal issue before the High Court was whether the respondent had successfully rebutted the presumption of unjust enrichment as defined under Section 28D of the Customs Act, 1962 . The Court scrutinized the documentary evidence produced by the company, which included detailed sales invoices, statutory audit reports, balance sheets for the 2014-2015 and 2015-2016 financial years, and a certificate issued by an independent chartered accountant.

The High Court emphasized that the company had provided comprehensive proof that the burden of the duty had not been transferred to the buyer. The Tribunal had noted that the invoices clearly indicated that the CVD amount was neither recovered from buyers nor reflected in the billing documents. The court observed that the lower authorities’ reliance on this documentation was consistent with established legal practice. Specifically, the bench noted: "The rejection of the CA certificate by the AA was contrary to Board Circular No. 18/2010 dated 07.08.2010 ."

The department had further argued that the company’s failure to list the potential refund as an "amount receivable" in its balance sheets was evidence that the cost had been passed on to customers. However, the High Court found this argument unpersuasive, holding that the internal accounting methods of the company did not automatically equate to proof that the burden had shifted to the market.

Judicial Scrutiny and Legal Precedents

In delivering its judgment, the Division Bench reiterated that the appellate findings were not only factually supported but also legally sound. The court stressed that the duty of the High Court in such an appeal is to ensure there is no perversity or patent illegality in the lower tribunal's findings. The bench stated: "The conclusion of the tribunal upholding the findings of fact recorded by the FAA suffers from no legal or factual error much less perversity ."

The High Court also drew parallels to its own recent decision in Principal Commissioner of Customs (ACC Imports) v. Nokia India Sales Pvt. Ltd. , which similarly established that a certificate issued by an independent chartered accountant is a valid and robust document for discharging the burden of proof required to claim a refund under Section 27(2) of the Customs Act . By aligning this current decision with that precedent, the Court affirmed that such certificates, when corroborated by standard books of account, carry significant evidentiary weight that cannot be discarded by customs authorities without substantial cause.

The court ultimately found that the department had failed to raise a substantial question of law that would warrant interference with the concurrent findings of the appellate authorities. The contention that price uniformity before and after the change in CVD payment status proved the burden was shifted was rejected, as the department failed to link pricing decisions directly to the duty payments.

Final Operative Order

With the dismissal of all five appeals, the High Court has finalized the entitlement of Micromax to its refund claims. The court has also effectively cleared the path for the company to receive the associated interest payments on the withheld refunds, a matter that had been contested in separate appeals by the department. By upholding the Tribunal's decision, the High Court’s ruling confirms that the company is entitled to the principal refund amounts, as well as the interest accrued due to the delayed settlement.

The case concludes with the court dismissing the appeals and disposing of all pending applications, ensuring the matter is now fully resolved in favor of the respondent, effectively confirming the repayment of approximately ₹175 crore along with interest as mandated by law.