Custom, Excise & Service Tax Tribunal
M/S Rama Cylinders Pvt Ltd vs Commissioner Of Customs-Kandla on 16 February, 2016
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
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Appeal No : C/11827/2015
(Arising out of OIA-MUN-CUSTM-000-APP-114-15-16 Dated 29/07/2015 passed by Commissioner (Appeals) of CUSTOMS-KANDLA)
M/s Rama Cylinders Pvt Ltd : Appellant (s)
Vs
Commissioner of CUSTOMS-KANDLA : Respondent (s)
Represented by:
For Appellant (s) : Shri R. Subramanya, Advocate For Respondent (s): Shri S. K. Shukla, Authorised Representative For approval and signature :
Mr. P.M.Saleem, Hon'ble Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Departmental authorities? Yes CORAM : Mr. P.M.Saleem, Hon'ble Member (Technical) Date of Hearing / Decision : 16.02.2016 ORDER No. A/10097 / 2016 Dated 16.02.2016 Per : Mr. P. M. Saleem
The appellants herein M/s. Rama Cylinders Pvt Ltd. Kutch, Gujarat, are before us aggrieved by the impugned order of Commissioner (Appeals) in which he ordered recovery of refund of Rs. 36,03,939/-, alleged to have been erroneously paid to the appellants, on the ground that the appellants have not satisfied that they have not passed on the incidence of duty and therefore, they are not eligible for the refund on the principle of unjust enrichment.
2. The brief facts of the case are as follows:-
The Appellants filed a Bill of Entry No. 6687787 dated 08.09.2014 for clearance of 254.590 MT Seamless Steel Tubes of 317 mm. The bill of entry was assessed by EDI system in RMS and duty for the same was paid on 09.09.2014. As per Notification No. 02/2014-Customs (SG) dated 13.08.2014, safeguard duty @ 20% is payable on seamless steel tubes not exceeding 27301 mm (Outer Diameter). However, in this case the claimant imported seamless steel tubes of 317 mm (Outer Diameter) and safeguard duty was paid erroneously. On verification of bill of entry, it was found that system has taken safeguard duty @ 20% with other duty. The claimant paid total duty Rs. 81,76,002/- instead of actual duty after re-assessment, payable as Rs. 45,72,063/- which resulted in excess payment of duty of Rs. 36,03,939/-. The claimant filed a refund claim for excess duty of Rs. 36,06,939/- under the provisions of Section 27 of the Customs Act, 1962.
The adjudicating authority vide impugned order sanctioned the refund claim of Rs. 36,03,939/- to the claimant after observing that the claimant has submitted a certificate issued by Chartered Accountant certifying that the claimant has not availed excess duty and has not passed on the excess duty to the buyer or any other person hence the question of unjust enrichment does not arise and the same is outstanding for refund from customs Department under the head of Customs duty receivables.
3. Revenue filed appeal with Commissioner (Appeals) aggrieved by the said order of the adjudicating authority. Commissioner (Appeals) ordered recovery of the refund amount vide the impugned order-in-appeal.
4. Heard both sides. The Learned Counsel for the appellants takes us through the findings of the Adjudicating Authority in the impugned order-in-original dated 27.11.2014, relevant portion of which is reproduced below:-
The claimant has filed B/E No. 6687787 dated 08.09.2014 for 274.590 MT, which was assessed by EDI system in RMS and duty for the same paid on 09.09.2014 vide TR-Challan No. 2009652006. On verification of B/E it is found that system has taken safe guard duty @ 20% with other duty. Total duty had been paid by Importer Rs. 8176002.00 instead of actual duty after re-assessed of B/e was Rs. 4572063.00, resulting excess payment of duty. Accordingly, on updating of system and after re-assessed from customs in the system on 16.09.2014 as per JC Order dated 16.09.2014 for correct Duty Rate as under:-
Basic 10%+CVD 12% + Edu. Cess 2% + H. Sc. Edu. Cess 1% + sad 4% i.e. Total Duty Rs. 4572063/-.
Hence excess payment of Rs. 3603939/- (i.e. 8176002.00 4572063.00/-) made by claimant as per below in table A. The Claimant has furnished a self-declaration along with the refund claim to the effect that he has not passed on excess duty paid i.e. Rs. 3603939/- to any other person and a declaration that they have appointed M/s P F Chhajed & CO., Chartered Accountant for preparation of Companys Annual financial Accounts for the period of 01.09.2014 to 20.09.2014.
The claimant has submitted Certificates dated 22.09.2014 issued by the Chartered Accountant M/s P F Chhajed & CO., certifying that they are duly appointed for audit of annual financial account for the Period of 01.09.2014 to 20.09.2014 by the claimant; that claimant has not been availed excess duty by the firm and has not passed by the importer to the buyer or any person and as such the question of unjust enrichment does not arise and the same is outstanding for refund from Customs Department under the head of Custom duty receivable.
5. The Learned Counsel further submits that the subject goods were taken to their factory and consumed therein in the manufacture of their final goods namely, High Pressure Cylinders. He argues that therefore there is no question of passing of the incidence of the duty. He further submits that Re-assessment of Bill of Entry was done within a day of the date of initial wrong assessment. They have also not taken the higher duty element into the cost of final goods as certified by the Chartered Accountant. He relied upon the decision of the Tribunal in the case of Bilcare Ltd. vs. Commissioner of Customs, Pune 2014 (308) E.L.T. 166 (Tri.-Mumbai).
6. On the other hand, the Learned Authorised Representative for Revenue submits that the appellant had not produced any supporting documents other than Chartered Accountant Certificate to prove that the incidence of duty has not been passed on. He draws the attention of Bench to the findings of the Commissioner (Appeals) in this regard. He further contents that even if the subject goods are consumed by the appellants in their factory in the manufacture of final goods, the duty incidence would be passed on, if the higher duty element is included in the cost of the final goods.
7. On careful consideration of the arguments of the both sides and on perusal of the records, we find that the Customs EDI system had assessed the subject Bill of Entry under RMS on 08.09.2014 and had taken safeguard duty @20% alongwith the other duties, as the system had not been updated. Admittedly there was no safeguard duty on the import of the subject goods. The EDI system was updated on the next day and the Bill of Entry was re-assessed on 09.09.2014, as is evident from the copy of the re-assessed bill of entry submitted by the appellants as a part of the paper book with the present appeal. It is also observed that the Chartered Accountant, P F Chhajed & Co., has furnished the Chartered Accountants Certificate dated September 22, 2014 which, interalia, states;
We further certify that Rama Cylinders Private Limited have not availed any duty drawback nor availed CENVAT credit in respect of payment of safeguard duty of Rs. 36,03,939/- (included in total duty payment of Rs. 81,76,002/-) We also certify that Rama Cylinders Private Limited have not passed on the incidence of above duty to buyer or any other person and the said amount is shown as Safeguard duty refund receivable under the head Current Assets. The said safeguard duty has not been charged to Profit and Loss account and therefore the same is not forming part of the cost of goods sold and hence the burden is not being passed on to the buyer or any other person.
8. It is thus clear that the Re-assessment was done immediately and also that the appellants had shown the excess payment of safeguard duty as refund receivable in their books of accounts. It is also certified that the said excess duty element has not been taken into the costing of the final products. Therefore, it is transparent that the excess duty has not been passed on and the principle of unjust enrichment has not been violated. The appellants are clearly eligible for the refund of the excess payment of duty. The Tribunal in the case of Bilcare Ltd. (supra) wherein exactly the same situation had arisen, the Tribunal held as follows:-
Further, I find that the appellant has been able to prove that the amount is recoverable from the Customs and he is able to produce the Chartered Accountant Certificate certifying that the amount of excess safeguard duty has not been formed the part of selling price of the goods. Therefore, the appellant has proved that the burden of duty is not passed on the buyer and the bar of unjust enrichment is not applicable to the case. In these circumstance, I do not find any merit in the impugned order, the same is set-aside. Appeals are allowed with consequential relief.
9. In view of the above analysis, we find that the impugned order-in-appeal of the Commissioner (Appeals) cannot be sustained and therefore, the same is set-aside.
10. Appeal allowed.
(Dictated and pronounced in the open Court) (P.M.Saleem) Member (Technical) G.Y. 5