Customs, Excise and Gold Tribunal - Delhi
Motorola India Ltd. vs Cce on 14 May, 1999
Equivalent citations: 1999(85)ECR449(TRI.-DELHI)
ORDER Jyoti Balasundaram, Member (J)
1. The above appeal arises out of the order of the Commissioner of Customs and Central Excise (Appeals), Bangalore upholding the order of the Assistant Commissioner of Customs, Bangalore, who while sanctioning the refund of Rs. 5,39,674/- representing customs duty paid in excess on rack mounted modems covered by Bill of Entry, had ordered crediting of the refund amount to the Consumer Welfare Fund constituted under Section 12C of the Central Excise Act 1944, on the ground that the appellants did not discharge the burden cast upon them to prove that they had not passed on the duty burden to their customers.
2 I have heard Shri S. Madhavan, learned Chartered Accountant, and Shri T.A. Arunachalam, learned DR.
3. In May 1995, the appellants had imported 2 Nos. of rack mounting modems from M/s. Motorola ISG/Codex USA, consisting of
i) Modulus 21 Nest 230V
ii) 21 Card 10 Slot B/P
iii) Fast managed Modem Cards In the purchase order dated 9.3.1995, the prices of Modulus 21 Nest 230V has been indicated as US $ 1135 per piece and the price of the 21 Card 10 Slot B/P has been shown as US $ 1100 per piece. The goods were supplied to the appellants by the overseas company vide invoice dated 10.4.1995 in terms of which they filed the relevant Bill of Entry No. 020958 dated 9.5.1995. As against the purchase order rate, the overseas supplier billed the Modulus 21 Nest 230V at US $ 11685 and the 21 Card 10 Slot B/P at US $ 1135. In other words, the overseas supplier had billed the appellants at a total invoice price of US $ 44540 (net of the insurance and freight) as against the agreed amount of US $ 23370/-, thus resulting in overcharge by US $ 21170. The Bill of Entry was filed on the basis of the supplier's invoice, and customs duties were discharged by the appellants on the basis of the enhanced amount as shown in the invoice. Thereafter, they took up the matter with their supplier who acknowledged that they had overcharged the appellants in their invoice dated 10.4.1995. Letter of acknowledgement is dated 8.6.1995. The appellants paid only the agreed price for the supply of the goods, as per the purchase order dated 9.3.1995, as evidenced by their bankers, M/s. Corporation Bank who have issued a letter on 20.7.1995 clearly stating that the Bank had remitted only a total US $ 23709.97 (US $ 23370 towards cost of supplies and US $ 339.97 towards freight and insurance) to the foreign supplier. The appellants sold Modulus 21 Nest 230V at Rs. 98111/- per piece, 21 Card 10 Slot B/P at Rs. 1,28,109/- per piece and the Fast Managed Modem Cards at Rs. 45650/- per piece to their customers, M/s. Sita World Travels. Compared with the landed cost of Rs. 3,86,171/- of Modulus 21 Nest 230V and Rs. 75,312/- for 21 Card 10 Slot B/P, the appellants had recovered less and incurred an overall gross loss of 126% which establishes that the excess customs duties paid on the value shown in the Bill of Entry had not been passed on to their customers, but were borne by the appellants themselves. The Chartered Accountant's certificate dated 18.7.1995 confirms the above. The authorities below have, however, arrived at the unit price of the Modulus 21 Nest 230V as per Rs. 66048.27 and the unit price of the 21 Card 10 Slot B/P as Rs. 64011.56, compared it with the selling price of Rs. 98,111/- for the first item and Rs. 1,28,109/- for the second item, to hold that there has been a profit margin of 33% and 50% respectively so as to hold that the excess duty paid has been recovered by the appellants from their customers. The error arises in fixing the unit price as mentioned above by taking into account the duty payable on the assessable value as per the purchase order and ignoring the vital factor that duty was paid on the basis of the higher prices shown for these two items in the supplier's invoice (The Bill of Entry shows the higher assessable value and duty paid thereon).
4. The appellants have thus clearly shown that they have borne the incidence of excess customs duties themselves and have not passed on the duty burden to their customers. I, therefore, hold that they had discharged the burden of proving that they have not passed on the duty burden to their customers, set aside the impugned order and allow the appeal with consequential relief.
Dictated in open court.