Karnataka High Court
Union Of India Rep By Its Commissioner Of ... vs M/S Pharmacia India (P) Ltd on 1 April, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 15" DAY OF A.PR!L. 2010
PRESENT
THE HON'BLE MRJUSTICE K L MANJUNATH
AND
THE HON'BLE MRSJUSTICE B V NAGARA'I5:I¥{N.£};P '7 .
CSTA No.4 OP 205g . é
Between: E E E E
UNION OF INDIA
REP. BY COMMISSIONER OF CUSTQMIS
C R BUILDINGS,
QUEENS ROAD . '_ 5 I I
BANGALORE - 560 001 VI ._ iv I 'I -_APPELLAN'1'
" I :{'13Y$J§7I"Y IPIAR-IPRASAD;"ADv.,;
M /S. PPIAR_MAcIAwV1ND'IA
JAKKASAND-RA vII.I..AG~Ij.'
NEI4Al'.'LANGALA.,'I'ALUK '-
BA1\T€:}AI,ORE-562¢123A. RESPONDENT
_ _ f*--..IBY SR1 RAYAPPA,ADV.. FOR
_ I . SRE K G RAGHAVAN, ADv.,I
"KRIS cS'I";Ai'j_I«"IPi,F.D U/S. 130[AE OF THE cD"STOI\/IS ACT. 1962
E"VARISING"-OU'Ii_vOI?ORDER DATED 27.7.2005 PASSED IN PINAL ORDER
NO.I238/2Qo'5OIN APPEAL NO.C/323/2002 DT.O3.08.05 VIDE ANN--A
ivAN_D»_I:fIfc.,. "
A APPEAL. COMING ON FOR HEARING 'I'I~IIS DAY. 13 V
NAGAIV THNA, 3.. DELIVERED THE FOLLOWING: A
3/4
JUDGMENT
The revenue has filed this appeal by challenging the final order No. 1238 of 2005 dated 27.07.2005 Appeal No.C/323/2002 dated 3.82005.
2. At the time of admissionsitself, substantial questions of law were 5.9.2006 which read as under:
"1. Whether, on thefacts"dridljcircurristaftces of the case, refi;m.d_A lclaiiii by the respondent is not 0'Ve'oUer_e.d"[;by_'_. 'ury'ust enrichn1e~:'1t'? " 0 " V' V'
2. discharged its 'burden 'irv':"-:'he..»rfaa_tter' of passing on liability directly or 'injdirecatly. to other person?"
3. The facts lleadpingl'tolthesfiling of this appeal are that the :'1fespond2ent;"Al?} alssessee had imported certain machinery on pairinlezrtl it subsequently found that the 0Vlsa.id goods exempted from customs duty by virtue of it0l_:'V:".aot.iii€ationV'"dated 2.6.1998. Therefore. the respondent -- a.s'sel's.se'e'0lfiIed an application for refund of the amounts V mis'tal:enly paid as duty.
fix.
3
4. The Deputy Commissioner [Refunds] held that the application was in time and that the same was not hit by unjust enrichment. However. he concluded that the imported machinery was not covered' by the not4ific'a_tion regarding exemption. He therefore rejected thei. refund.
5. Against the said order, the responidlenlt preferred an appeal before the V(J'£)i:'1fiti~I1f1iss.ior1e'r--.1;/Xppeals] sjwho '' came to a conclusion that thei""iinipor'ted equipment was entitled for exemption under.;the'--vsaid__.Ano,tific'ation and also the fact -'was entitled for refund.
However, he d'ir_e"cted" amount to be refunded has to be.p'paid.~tr> Cons'um_er,Welfare Fund on the ground that respori-<l_ent'..thad unjust enrichment with regard to the said amount;
---- ..Th.e same was challenged by the respondent M assessee :§'¢r¢:-éwiire CESTAT. The Tribunal has taken into i consideration the fact that the exemption was granted by the ékflléommissioner {Appeals} and as also on facts held that the 4 respondent M assessee did not have the benefit of any unjust enrichment and accordingly allowed the appeal of the respondent.
7. Being aggrieved by the said order. the .I'E)V€I1i;!€'%"<«.4l'*'IavlS preferred this appeal.
8. We have heard learned counsel for thew--revenuie learned counsel for the respondent ~ Vasse-sse1e.3, ' l
9. The main contention on behalf of-the VreJer:.ig;ve_,_Vis that when there is no challenge to the__l:assesgsrne'nt.order passed in the instant had attained finality, the application 'foVfe..refunVd. have been considered and v1:l1e_refo3fei,the' authlo1'--it.ie__sg.could not have granted exemption with ;rega1*d"=teflpayment of customs duty when the '7,____assessArnent or-d;eri1'was not modified or reviewed. He further that when the assessee had unjust enrichment in of the duty which had been paid by the assessee . was subsequently exempted, the Tribunal was not "»justified in holding that there was no unjust enrichment on 5 the part of the respondent -- assessee. He therefore submits that the order of the Tribunal has to be set aside and the refund application has to be rejected as held by Commissioner [Refunds].
10. Per contra. learned counsel for _the assessee while supporting the order oftheV-Tribuvnal:'haslallso"av submitted that as against theflyorder pasisled lgby the Commissioner [Appeals}, r1l-of;1ppleal§V- by the revenue with regard to the entitleme.r:1.t:*i.of 'granted under the notification datedE'o2l.,._6.,l"9§8_lto_t.healsse'ssee and therefore the present.._ap.p'eal _1nairi't.ainab1e. 1}. Having l9ie_alI*'dV counsel on both sides and on perusalnf n1ate'rial___o_n record, we find that while initially autho1=i._tyr regard to Refunds had held that the "¥,___.prespondent ¥'la;=~Sessee was not entitled to exemption, the to-«.p_ap~pe1late authority had allowed the exemption as per the no'tlilfi£:ati'on dated 2.6.1998. However, a direction was given H the amount to the consumer welfare fund on the ground of unjust enrichment. in fact, the Tribunal has gone ii» 6 into this question and has held that in fact there was no unjust enrichment by the assessee when in fact there was no collection of the duty amount from the customers of the assessee and the duty had been mistakenly assessee to the Department and when that was exemption claimed which was just an.d»»proper and]wh'engar1_ it order entitling exemption was granted.
the assessee having unjust enrichment "or not "
arise at all. We find that th'e_said_.reasoning of th'eT.riEbunal is correct which does not callt.l'for--,~iar1y_.« interference in this appeal.
12. It is also that the machinery which was imported l"b_\,,r the 'respondent --~ assessee was for :'linsltallVati0'11:,.,:at i'tsé_factoryHlprernises to be used for the purpose of mariI1'_ifactu--r__e ascaptive consumption and not for further sale of the sanne, in which event. there would have been no tdcollect the duty from its customers. When such beinglthe case, the Tribunal was right in holding that the claimed was not hit. by the rule of unjust enrichment. 93 «X
13. The decisions relied upon by learned counsel for the appellant in the case of 'UNION OF INDIA vs. PESTICIDE PVT. LTD.,' reported in 2000 and in the case of 'PRIYA BLUE INDUST1?.{'E.S43:'::jI.fi'i).,.Avtfl COMMISSIONER OF CUSTOMS lireplertiegl 2004 [1721 ELT 145 [so], are ne't..__ap}§lie2i'b]e te0Tthe..,fae_ts fin' f the present case.
14. Accordingly, the subS'tetn.tial -of law raised in this appeal have beei1v__ansvJere§l: zf§3VQt1'r respondent
-- assessee end é{g?iinst7t1*xe4refikenuelw
15. Accordifigly, tlre dismissed.
ESEQE Sd/--» HTDGE