Customs, Excise and Gold Tribunal - Mumbai
Picasso Exports vs Commissioner Of Customs (Acc) on 19 March, 2004
Equivalent citations: 2004(173)ELT214(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. The appellant situated at Bombay imported 10,000 piece of electric brick games at Chennai Air Cargo Complex declaring a value which was rejected and loaded. Commissioner (appeals) set aside the order of enhancement of value. Consequently appellant was entitled to refunds.
2. Deputy commissioner refunds, called for triplicate copy of B.E. and the books of accounts to rule out unjust enrichment. The appellants produced the following documents.
(a) Sale Bill No. 2/97-98 dated 1.3.98
(b) Sale invoice Bill No. 1/97-98 dated 28.2.98
(c) SIL debit note dated 1.1.98
(d) Customs House Agent, M/s Swen Agencies Pvt. Ltd. bill receipt.
(e) Bill of exchange dated 3.1.98
(f) HDFC draft dated 4.2.98.
(g) Bill of Entry along with purchase order, proforma invoice, commercial invoice, packing list, Airway bill and documents arrival notice dated 29.1.98.
The deputy commissioner held as follows:-
"Assessable value declared in the above Bill of Entry is Rs. 241,188/- but value adopted is Rs. 7,50,000. Duty paid on the adopted assessable value is Rs. 3,51,751. Duty per piece work out to Rs. 35.18 (approx.).
From the sales invoice for B/E No. 1771/9.1.98 produced by your consultant the loss incurred by you works out to Rs. 2,77,132 which is given below:-
_____________________________________________________________________________ Invoice Sold to Qty Unit rate Total amount _____________________________________________________________________________
1) 2/97-98 Dristhi Intl. 4650 47.00 2,18,550 dt.28.2.98 Thane
2) 1/97-98 Krishna 5000 46.00 2,30,000 dt.28.2.98 Trading Corpn Ahmedabad ----- ----- -----
____________________________________________________________________________ 9650 4,48,550/-
shortage 350 _____________________________________________________________________________ 10,000/-
Landed cost as indicated in consultant's letter is as follows:-
Purchase price - Rs. 2,35,095 Customs duty - Rs. 3,51,750 Licence premium Rs. 74,250
_____________________________________________________________________________ Detention/CHA Bill Rs. 64,587 _____________________________________________________________________________ Total Rs. 7,25,682/-
_____________________________________________________________________________ Landed cost - Rs. 7,25,682 _____________________________________________________________________________ Sold for - Rs. 4,48,550 _____________________________________________________________________________ _____________________________________________________________________________ Loss stated to have been Incurred Rs. 2,77,132 Regardless of the loss, the unit sale price of Rs. 46/47 per pc is inclusive of the duty amount of Rs. 35.18/pc approx, (the invoices do not show the element of duty separately in accordance with the provision of Section 28D of Customs Act, 1962.
"Further held that as per the provision of Section 28c of Customs Act, 1962 the sales invoices should indicate the amount of duty which will form part of the sale price at which goods are to be sold; but the above sale invoices do not show the amount of duty. In this view of the matter D.C held that in terms of Section 28D the duty amount of Rs. 35.18 per pc shall be deemed to have been passed in full to the above buyers to whom the Electronic Brick Games were sold for Rs. 46/47 per pc inclusive of the duty amount of Rs. 35.18 per pc thereby the cost of the goods would be Rs. 1.82 per pc to account for the loss stated to have been incurred buy the importer accordingly the Deputy Commissioner ordered refund arising out of the appellate order the credited to consumer welfare fund under Section 27 of the Act"
3. Commissioner (appeal) found
(a) That the evidence produced by the appellant clearly shows that there has been a loss of Rs. 2,77,132 in the entire transaction and the Deputy Commissioner while ordering deposit of the refund amount (duty paid Rs. 351750-duty payable of Rs. 113056=Rs. 238694 has erroneously held that he entire amount of duty burden has been deemed to have been passed on to the buyer of the Brick Games.
(b) That non mention of the duty element separately in the invoice as per requirement of Section 28C relates to the area of procedure and on-fulfillment of this condition is not fatal to the claim for refund particularly so when the presumption that the duty burden has been passed on to the consumer is a rebuttable presumption as has been held in Mafatlal's Case Para 91 1997 (89) E.L.T. 247.
(c) It was further pleaded that the D.C has fallen in great error when he held that the cost of the goods would be Rs. 10.82/11.82 per piece in as much as he has failed to notice that cost of goods is a pure question of fact and cannot be left to presumption. In the context attention was brought to the import invoice showing the price of the goods to be US$ 0.60 per piece which approximately works out to Rs. 27 per piece.
(d) On the issue of non-mention of the duty element separately it was stated that the law does not permit to recover the refund of duty if the amount of duty element has already been passed to the consumer i.e. it prohibits unjust enrichment. In achieving this object there are conditions but some if the conditions may be substantive, mandatory and based on consideration of the policy and some others may merely belong to the area of procedure. It would be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purpose they were intended to serve. The Supreme Court decision in Mangalore Chemicals 1991 (55) E.L.T. 437 (S.C.) was cited to support this contention
(e) Directed the Appellant to produce the Income Tax Returns and the Balance Sheets and to produce sales invoices for the same item before and after the present sales were effected, the party was unable to produce the same for good reasonable which was communicated to the Commissioner (Appeals) in the form of a letter dated 24th January, 2001-but the Commissioners held that it is not proved that the duty burden has not been passed on to the consumer and accordingly upheld the Order-in-Original vide his impugned order dated 8th February, 2001.
Hence the present appeal.
4) After hearing both sides and considering the matter it is found
(a) Commissioner (appeal) is in error in ignoring the submission as regards the non mention of the duty element separate by on invoice of sale to be in the area of procedure, especially when the appellants can otherwise prove that the duty burden can't has not passed on to the consumer causing the huge loss suffered in view of the documents submitted to the Deputy Commissioner whose authenticity is not doubted. Thus the commissioner appeal should not have upheld the bar of unjust enrichment in the present case.
(b) The commissioner appeal can't question the authenticity of sale invoiced by asking the appellants to substantiate the price quotation for the period prior to and after the sale.
(c) It was for the Department to have brought on record evidence to prove the case of unjust enrichment burden passed on. The sale price and costing of the goods as submitted by the appellant that has not been questioned by both the authorities below. Therefore non filing of IT returns and of Balance Sheet to the Commissioner (appeals) are issued not germane and are irrelevant for considering the question of unjust enrichment the sale of imported goods been made by the importer. The cost of goods is a pure question of fact and profit and loss are to be determined consequently to the cost of the goods of Import duties, especially on enhanced value would be a important component of costs.
(d) Since the presumption raised by Section 28D of the customs act 1962 is a rebuttable presumption of law and not conclusive merely because the documents of sale are not as per the provision of Section 28 DR it can't be presumed that whatever the appellants has recovered from his customer was first duty of customs and there after his own costs.
(e) Vide final order No. A/1198/2003 NB(SM) dated 3.10.2003 in the case of Mohan Sales (India), the Tribunal set aside the finding of unjust enrichment and orders of credit to welfare fund in a case where Revenue conclusion that it is not possible to sell goods on losses was set aside after accepting the contention that presumption in law.
Of having passed the duty burden is a rebuttable presumption & since invoice & Certificate was not being disputed. The refunds were ordered as order directing the same to be credited to Consumer Welfare Fund have not sustained. Following this decision, & finding the facts to be similar this appeal is also to be allowed since nothing contrary to this decision of Tribunal has been shown.
5) In view of the finding orders arrived at by the lower authorities are set aside and appeal allowed.
(Pronounced in Court)