'Refund cannot be denied without contradictory evidence': HC directs customs to release ₹5.76 Cr to Nokia

"In the face of the chartered accountant’s certificate and documents that have been submitted by the company, there has to be some evidence to the contrary that would require the Adjudicating Authority to reject the refund," the Delhi High Court observed while dismissing appeals filed by the Principal Commissioner of Customs challenging a refund granted to Nokia India Sales Pvt. Ltd.

The dispute arose from refund claims of ₹2.33 crore and ₹3.43 crore made by Nokia. The company contended that it had paid excess additional duty on imported mobile phones during 2014–2015 and had not passed on the duty incidence to consumers. In support, it submitted a chartered accountant’s certificate along with related documentation.

The refund claims were partially allowed by the Adjudicating Authority in 2017, however, the sanctioned amounts were ordered to be credited to the Consumer Welfare Fund under Section 27(2) of the Customs Act, 1962, on the ground that the burden of duty incidence had not been conclusively shown to rest with the company. This order was affirmed by the Commissioner (Appeals) but subsequently overturned by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which held Nokia entitled to the refund.

Challenging the CESTAT's order, the Customs Department argued that the chartered accountant’s certificate was insufficient to demonstrate that the burden of duty had not been passed on, especially in the absence of complete ledger accounts or corroborative documentation under Sections 28C and 28D of the Customs Act.

Rejecting this contention, a Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that the initial burden placed on the claimant had been discharged, and stated that “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.”

The Court further observed that all three adjudicating authorities had accepted the refund claims, and there was no justification in law for diverting the sanctioned sums to the Consumer Welfare Fund in the absence of contrary evidence from the Department.

In a balanced conclusion, the Bench directed that the refund of the principal amount along with interest as per law be credited to Nokia India Sales Pvt. Ltd. within two months. However, accepting the company’s offer, the Court directed it to voluntarily contribute ₹25 lakh to the Consumer Welfare Fund and ₹10 lakh to the Delhi High Court Bar Association within a month thereafter.

The matter is now listed for compliance on 10 November 2025.

Case Title: Principal Commissioner of Customs Vs. Principal Commissioner of Customs

Case No.: CUSAA 66/2025 & CM APPL. 23910/2025

Coram:  Justice Prathiba M. Singh, Justice Rajneesh Kumar Gupta

Advocate for Appellant:  Advs.R. Ramachandran, Prateek Dhir

Advocate for Respondent: Advs. Kamal Sawhney, Deepak Thackur, Rishabh Mishra, Aakansha Wadhwani