Gujarat High Court
M/S Oil And Natural Gas Corporation Ltd. vs Union Of India on 20 February, 2020
Author: S.R.Brahmbhatt
Bench: S.R.Brahmbhatt, A. P. Thaker
C/SCA/19096/2018 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19096 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Sd/-
and
HONOURABLE DR.JUSTICE A. P. THAKER Sd/-
================================================================
1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
================================================================
M/S OIL AND NATURAL GAS CORPORATION LTD.
Versus
UNION OF INDIA
================================================================
Appearance:
MR AJAY R MEHTA(453) for the Petitioner(s) No. 1,2
MR DEVANG VYAS(2794) for the Respondent(s) No. 1
VIRAL K SHAH(5210) for the Respondent(s) No. 2
================================================================
CORAM: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
and
HONOURABLE DR.JUSTICE A. P. THAKER
Date : 20/02/2020
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT)
1. Present petition has been taken out for assailing order dated 21st November 2017 and 16th July 2018 passed by the Page 1 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT respondent calling upon the petitioner to furnish the details, which according to the petitioner were not germane and material and it was merely an attempt to dodge the responsibility of refunding the duty paid by the petitioner. During the pendency of this petition, the respondent issued order dated 29.11.2019 on the refund application holding that the petitioner was entitled to seek refund and the amount was also quantified but on account of the petitioner's failure in producing the documentary evidences indicating that the petitioner has not passed on the duty burden to the consumers or end-users, such duty amount was deposited and paid into the consumer funds maintained under Section 12 (C) of the Central Excise Act, 1944, created for reserving such amount of duties, which are not admissible or not refunded back to the claimant, and amount of duty of customs referred to in Sub- section (2) of Section 27 or Sub-section (2) of Section 28-A or Sub-section (2) of Section 28-B of the Customs Act, 1962.
2. Facts in brief shorn of unnecessary details and required only for addressing the controversy in question deserve to be set out as under:-
2.1 The petitioner entered into a contract with a company named Messrs Tecno Export, Moscow, in 1986 for exploration of Hydrocarbon. The said contract dated 4.12.1986 was a turn key project for conducting seismic survey in North Cambay and Cambay Basins. The contract dated 19.12.1986 was for drilling of 26 numbers of exploratory wells in the North Cambay Basin.
The contractor-Techno Export imported their equipment and material in sixteen consignments to Kandla Port, out of which five consignments were received in October 1986 and eleven Page 2 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT consignments were received in February-March 1987. All the sixteen consignments were permitted to be cleared on provisional basis against ITC bonds and the petitioner-ONGC paid custom duty on merit rates at the time of clearance of consignments. The essentiality certificate for payment of custom duty on concessional rates was received and on that basis the claim for refund of excess duty was lodged with the authorities at the port and the custom authority, Kandla Port, on 12.9.1989 in respect of five bills of entry and on 14- 15.9.1989 in respect of eleven bills of entry.
2.2 The demand for documents for processing the refund claim were made, which were furnished, however, it continued and, therefore, the correspondence were exchanged between the parties. There were time and again orders by the authorities, which were challenged to the superior authorities and matters were remanded. The time was consumed thereunder but, ultimately, the competent authority passed an order on 23.1.2017, which was issued on 24.1.2017. Operative part whereof reads as under:-
"(i) I allow the benefit of exemption of Notification No.197/76-cus dated 02.08.1976 for the five B/Es mentioned at Sr. No. 1 to 5 in the table as discussed above, considering the same as provisionally assessed BOE as on date.
(ii) I allow the benefit of exemption of Notification No. 515 / 86-cus dated 30.12.1986 read with Notification No. 25/ 87-Cus dated 23.01.1987 for the ten B/Es mentioned at Sr. No 6 to 15 in the table-B as discussed above considering the same as provisionally assessed as on date.
(iii) The benefit of exemption of Notification No.25/ 87- Page 3 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT
Cus dated 23.01.1987 will also be extended to BOE No. F-00612 dated 17.02.1987, when the same will be produced.
(iii) A Chart of Custom duty payable on final assessment of the 15 BOE is attached as Annexure-A with this Order- in-Original.
(iii) Subsequent to this final assessment order of the BOEs as detailed above, the importer will be required to file refund claim under Section 27 of the Customs Act, 1962 and rules framed thereunder within the specified period. The refund claim shall be disposed off in accordance with the principles of 'Unjust Enrichment' on merits.
This order is issued without prejudice to any other action against the importers for the acts of omissions and commissions discussed above or related thereto under the Customs Act of 1962 or any other law of the country."
(emphasis supplied) 2.3 The petitioner appears to have approached the authority under communication dated 16th August 2017 produced on the compilation at page 115 for seeking refund with interest, which were totalling to Rs.22,44,88,330.71. The reminder was sent on 10th November 2017, which is also produced in compilation at page 117. The respondents sent communication on 21.11.2017 to the petitioner seeking clarification on discrepancy/deficiency which they noticed, for ready reference, the same deserve to be extracted and reproduced here verbatim.
"Please refer to your refund claim application letter dated 16.08.2017 (received in this office on 21.08.2017) for Refund of, Customs duty of Rs. 5,41,82,641.08 & Interest of Rs. 17,03,05,689.63 (Total claim of Rs.22,44,88,330.71).Page 4 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT
In this connection, it may be noted that during the scrutiny of your above claim, it is found that you have not complied with all procedural requirements prescribed and have also not submitted requisite documents leading to delay in processing of refund claims. The following discrepancies/deficiencies have been noticed;
(1 ) The refund claim application is not filed in the proper and prescribed performa as provided under Section 27 of the Customs Act,1962.
(2) Duty Payment Challans are not submitted evidencing duty payment.( Bill of Entrywise).
(3) Relevant Provisional Bill of Entry-Duplicate (Importer Copy) in Original not furnished.
(4) Relevant Ledgers A/c showing the customs duty paid against relevant Bill of Entry is recoverable from Customs authority not furnished.
(5) Relevant MODVAT/CENVAT ledgers/Register of the relevant period for verification of "No Modvat Credit has been availed by your unit against the relevant Bill of Entry" not furnished.
(6) If the goods are further sold, the copies of sales invoices to be furnished with relevant sales ledger.
(7) It is observed that certain Bill of Entry are relating to ONGC Ltd, Dehradun. Hence, a NOC required to be furnished by Dehradun unit; allowing you (Makarpura, Baroda Unit) to deal such claims on behalf of them.
Accordingly, documents related to Dehradun Unit are required to be furnished.
(8) Wokrsheet for Interest Calculation not furnished.
In view of the above, you are requested to comply the above discrepancies / Deficiencies along with all requisite documents within 15 days to this office or otherwise your refund claim application shall be returned to you without further communication in the matter."
(emphasis supplied) Page 5 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT 2.4 The respondent appears to have send one more communication dated 5.1.2018 styling it as a reminder No.I for processing the refund. In reply thereto, the petitioner addressed the communication on January 17, 2018 narrating the facts and urging the authorities that the case is very old, seeking opportunity to meet and explain in person. Accordingly, personal hearing was granted vide communication dated 23.2.2018 for 14.3.2018. That communication is also on record at page 123. Said recording of personal hearing had left two issues. According to them, relevant part thereof deserves to be set out as under:-
"(3) Regarding non submission of ledger a/c showing the customs duty paid against relevant Bill of Entry is recoverable from Customs authority, they explained that the matter is very old pertaining to year 1985-86, hence it is difficult for them to produce such ledger account.
However, they agreed to further comply within 15 day on this account.
(4) As regards to verification documents for availing Modvat/Cenvat credit or passing of duty elements to other persons, they said that their unit have not sold those goods covered in respective Bill of Entry and they have also not charged /recovered customs duty in invoice from buyer/ or passed on to any other firm/person. On this account they have already given C.A. Certificate. However, as regards to availing Modvat/Cenvat Credit on said duty by their unit, they explained that the matter is too old, hence they shall further comply within 15 days time."
2.5 On June 1, 2018 a communication is sent by the petitioner to the respondent reiterating the stand in respect to the refund. The custom authority sent letter on 16th July 2018 calling upon the petitioner to produce the documentary Page 6 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT evidences to satisfy the authority that "unjust enrichment" is not likely to accrue to the petitioner on account of refund and interest amount. The following queries were made. Therefore, the communication dated 16.7.2018 deserve to be reproduced hereunder:-
"Sub :Application dated 16.08.2017 for Refund claim of Customs Duty & Interest thereof; Total of Rs. 22,44,88,330.71 arising out of Order- In Assessment No.KDL/ DC/ NC/ 105/ GR-V/ 2016,dated 23.01.2017 issued by the Deputy Commissioner (GR.V), Customs House, Kandla-reg.
Please refer to your letter F.No. BDA/GS/ Appeal- Kandala/2012-13, dated 01.06.2018 (received on 07.06.2018) in respect of your refund claim application letter dated 16.08.2017 (received in this office on 21.08.2017) for Refund of Customs duty of Rs. 5,41,82,641.08 & Interest of Rs. 17,03,05,689.63 (Total claim of Rs. 22,44,88, 330.71).
In this connection, it may be noted that you have not yet produced any documentary evidence before me that you have not passed on or recovered the incidence of Customs duty for which refund being claimed from the buyers or any other persons and same is borne by you. The aspect of "Unjust Enrichment" is net yet cleared in this case. Thus the following documents are invariably required by this office to examine the aspect of "Unjust Enrichment".
(1) Relevant Ledgers A/c / Balance Sheet, showing the customs duty paid against relevant Bill of Entry is recoverable from Customs authority and no recovery thereof has been made from the buyers or any other persons.
(2) Relevant MODVAT/CENVAT ledgers/ Register of the relevant period for verification of "No Modvat Credit has been availed by your unit against the relevant Bill of Entry".Page 7 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT
Further, you have stated that the matter is pertaining to the year 1985-86 and relevant documents/ledgers A/c are not available with you. Then, in the absence of same, how the CA has given respective Certificate dated 08.08.2017 without verification of relevant documents/records. It is requested to clarify the same.
In view of above, you are requested to explain to the undersigned as to why your refund claim application should not be rejected for not providing above documents to examine the aspect of "Unjust Enrichment".
3. The petitioner appears to have approached the Court thereafter on 10.12.2018. The Court issued notice for final disposal, which was made returnable on 24.12.2018. Thereafter, time and again the matter was adjourned. On 9.1.2020, the Court passed following order:-
"Learned advocate for the petitioner seeks amendment by way of this application with following prayer:
"9(A) allow the present application and permit the amendments as prayed for.
(B) The Hon'ble Court be pleased to pass such and further orders as may be deemed just and proper."
2. Learned advocate for the respondent submitted that in fact, this amounts to putting up a substantively present case and therefore, let there be some time for filing reply.
3. Learned advocate for the petitioner is strongly opposing and submitted that it is unnecessarily amounting to delay the final hearing of the matter.
4. We are of the opinion that the Civil Application for amendment is required to be allowed. It goes without saying that the reply, if any to the amended portion, is always permitted to be filed. Civil Application is allowed. The draft amendment shall be carried out forthwith.
Page 8 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT5. Learned advocate for the respondent submitted that four weeks' time will be granted to place on record the reply to the amended portion that would be forming part of the main petition.
6. Learned advocate for the petitioner seriously opposes and submits that the delay in processing refund is itself sufficient and the proceedings before this Court ultimately will have to be on merits of the matter, wherein all sorts of questions may crop up including the preliminary objection of availability of alternative remedy. In that view of the matter, the Court may not grant as long as four weeks' time.
Put up the main matter on 23.01.2020."
4. On 31.1.2020, the Court passed following order:-
"Shri Viral Shah, learned advocate for respondent no.2 has placed on record the affidavit. Learned counsel for petitioner submitted that he is ready with the matter and as the time is getting over, there is urgency in the matter and accordingly, he urges the Court to keep the matter on 10.2.2020. Put up on 10.02.2020."
5. Thereafter, the impugned order was passed on 29.11.2019, which by way of amendment is challenged in present petition on a ground that the same was nothing but an act of overreaching the process of Court, as when the Court was in sessin of the matter and when the authority did advert to the Court proceedings, chose to precipitate the entire proceedings by way of order impugned and indicating that the appeal would be available thereupon. This was an attempt as per the submission of the counsel to thwart the present proceedings. Learned counsel for the petitioner contended that the development of the facts in the matter and exchange of correspondence between the parties would be sufficiently clear to support the contention of the petitioner that the claim of Page 9 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT refund has, in fact, inordinately been delayed, for the reasons best known to the authorities.
6. Learned counsel appearing for the petitioner further submitted that the facts touching upon the event of duty on the machinery in question were sufficiently clear to indicate that those machineries were never intended to be dealt with in any manner or traded by the petitioner so as to pass on the duty event or the duty component to the end-user or the customer. In short, the machineries were being imported as a part of turn-key project under which the contractor was to bring in those machineries for the purpose of operating them for drilling and for exploration purpose only and they were to be sent back along with original contractor as the machinery belonged to them and the ownership had not been changed. The technical aspect of import and the event of duty, if any, were naturally to be borne by the corporation as per the terms of the contract and, therefore, the exemption which was available was rightly available and the authorities did acknowledge the same and, therefore, ultimately after tossing the matter from one table to another and one authority to another, the authority had come to the conclusion that the case of refund was made out and, accordingly, the order of 24.1.2017 came to be passed.
6.1 Learned counsel appearing for the petitioner further submitted that the respondents were not justified in tossing the file from one authority to another and they were under obligation to process the refund as soon as possible. The petitioner has not only been entitled to receive the refund but entitled to receive the refund along with interest, which may be deemed fit by the Court.
Page 10 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT7. Per contra, learned counsel for the respondent invited the Court's attention to the affidavit-in-reply and submitted that the affidavit-in-reply along with order impugned would clearly indicate that the petitioner did not bring forward the requisite documents, which were required to be produced for seeking refund as it was a duty cast upon the claimant of refund to satisfy the concerned authority that the refund would not result into unjust enrichment to the recipient. Counsel for the respondent further submitted that the order in appeal is, in fact, appealable and, therefore, this Court under Article 226 of the Constitution of India may not entertain this petition.
7.1 Counsel for the respondent submitted that the claim of the authority for seeking appropriate documents for processing the refund or payment of refund cannot be viewed as a tactic or design to delay the refund. There cannot be any interest on the part of the respondent in not releasing the refund on being satisfied with the requirement of payment of refund. Learned counsel for the respondent submitted that the Court, therefore, may not entertain this petition and dismiss the same.
8. This Court has heard learned counsel for the parties and perused the papers and annexures to the petition.
9. The entire issue is in a very narrow compass. The facts narrated herein above and rather the order impugned will throw sufficient light on the aspects of the petitioners' entitlement for receiving the refund. It would not be, therefore, out of place to extract and reproduce certain aspects and observations of the authority in respect of the claim and refund. The authority, as could be seen from perusal of the Page 11 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT impugned order, enlisted the documents annexed by the petitioner, which deserve to be reproduced hereunder:-
"17. The claimant has filed following documents with current refund claim application;
(i) Refund application dated 16.08.2017 in prescribed proforma under Section 27 of Customs Act, 1962.
(ii) Worksheet dated 17.02.2017 for interest calculation.
(iii) Copy of Order-in-Assesment No.KDL/DC/NC/105/ GR.V/ 2016, dated 23.01.2017.
(iv) Order-in-Appeal No.570/2013/Cus/Commr(A)/KDL dated 21.08.2013;
(v) C.A. Certificate dated 08.08.2017 from Mayank R. Shah & Co., Chartered Accountant, Vadodara, certifying that, M/s. ONGC Ltd. has imported goods through the subject bills of entry and paid excise duty. As required for principle of unjust enrichment in the case before sanction of refund under Section 27 of the Customs Act, 1962 and rules framed thereunder, this is certified that the burden of customs has not been passed on by the importer to the buyer and that they fulfill the requirement of unjust enrichment.
(vi) Xerox copies of bills of entry bearing original endorsement of the concerned Assessing Officer and the Deputy Commissioner finalizing the assessment. The said bills of entry also bears the details of the duty payment entry from Personal deposit account (PD) and dates thereof.
(vii) Copies of ITC Bond No. (1) 25/23.02.1987 (2) 27/27.02.1987 & (3) 3705/03.10.1986 which were operative at the relevant period and same were cancelled later.
(viii)Undertaking dated 31.05.2018 for non submission Page 12 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT of original bills of entry
(ix) Undertaking dated 31.05.2018 for non submission of relevant ledgers and duty payment challans.
(x) Undertaking dated 31.05.2018 for non submission NOC of ONGC Dehradun."
..............
"19. I find that, M/s. Oil and Natural Gas Corporation Ltd., Vadodara have filed Special Civil Application No.19096 of 2018 in High Court of Gujarat, Ahmedabad challenging the legality, propriety and validity of the letters dated 21.11.2017 and 16.07.2018 of the Deputy Commissioner (Refund), Custom House, Kahdla, by which necessary documents were called for to examine the aspect of "Unjust Enrichment". Vide order dated 21.11.2019 Hon'ble High Court of Gujarat has adjourned the matter to 02.12.2019 and it is held that no further time shall be granted. I find that, there is no stay in the matter by the Hon'ble High Court of Gujarat to issue refund order on merits, Therefore, I proceed to decide the matter on merits.
.........
TIME LIMIT:
21. I find that, in terms of the sub-section 1 (1B) (c) of the section 27 of the Customs Act, 1962 where any duty is paid provisionally under Section 18 of the Customs Act, 1962, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment. The current application submitted by the claimant vide letter dated 16.08.2017 was received on 21.08.2017. Therefore, the refund Page 13 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT application is filed within the one year time limit stipulated in the Section 27 of the Customs Act, 1962 from issuance of Order-in-Assessment No.KDL/DC/NC/105/Gr.-V/2016 dated 23.01.2017.
Therefore, the refund application dated 16.08.2017 is not hit by bar of limitation of time provided in the Act ibid. Now I will discuss the merits of the case.
..........
23. Following the judicial discipline and acting upon the directions of the Commissioner of Customs (Appeal), in above said OIA dated 21.08.2013, the Deputy Commissioner (Group V), Custom House, Kandla vide Order-in-Assessment No.KDL/DC/NC/105/Gr.-V/2016 dated 23.01.2017 extended the benefit of exemption of Notification No.197/76-Cus dated 02.08.1976 and Notification No.515/86-Cus dated 30.12.1986 and finally assessed the 15 Nos. of Bills of entry as per below mentioned details;
Table-2
Sr BE BE Date Assessabl Custom & Exemptio Rate Duty Excess
No No. e Value Additional n of payable Duty paid
Duty paid as Notificatio Duty
per BE n claimed paya
ble
1 F- 05.10.198 1979122 2830546 197/76 40% 791649 2038997
02765 6
2 F- 05.10.198 320906 561929 197/76 40% 128362 433567
02766 6
3 F- 05.10.198 393870 673044 197/76 40% 157548 515496
02767 6
4 F- 05.10.198 210147 270155 197/76 40% 84059 186096
02768 6
5 F- 05.10.198 6931019 12929252 197/76 40% 2772408 10156845
02769 6
6 F- 17.02.198 12943291 11702330 515/86 25% 3235823 8466508
00607 7
7 F- 17.02.198 4591292 8750926 515/86 25% 1147823 7603103
00610 7
8 F- 17.02.198 359959 633528 515/86 25% 89990 543538
00611 7
9 F- 17.02.198 3107 5826 515/86 25% 777 5049
00613 7
10 F- 17.02.198 14342266 18984199 515/86 25% 3585567 15398632
00614 7
11 F- 17.02.198 551987 922232 515/86 25% 137997 784235
00615 7
12 F- 17.02.198 1087736 2518298 515/86 25% 271934 2246364
00616 7
13 F- 17.02.198 5209640 7081481 515/86 25% 1302410 5779071
00617 7
14 F- 20.02.198 16060 20878 515/86 25% 4015 16863
00641 7
15 F- 21.02.198 5078 9547 515/86 25% 1270 8277
00685 7
TOTAL 67894271 13711630 54182641
Page 14 of 20
Downloaded on : Fri Feb 21 01:49:40 IST 2020
C/SCA/19096/2018 CAV JUDGMENT
Therefore, after the final assessment an excess duty amount of Rs.5,41,82,641/- paid by the claimant was quantified by the Deputy Commissioner in the Order-in-Assessment No.KDL/ DC/ NC/ 105/ GR.V/2016, dated 23.01.2017.
24. Further, sub section 2 of Section 18 of Customs Act, 1962 is extracted here;
"(2) When the duty leviable on such goods is assessed, finally or re-assessed by the proper officer in accordance with the provisions of this Act, then-
(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed or re-
assessed, as the case may be and if the amount so paid falls short of, or is in excess of the duty finally assessed or re-assessed, as the case may be, the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;
(emphsis supplied) Therefore, in terms of the above provisions of Section 18 (2) (a) of Customs Act, 1962 the claimant is entitled for the refund of excess duty paid for the imports made by them subject to examination of doctrine of unjust enrichment."
.......
25. I find that, Order-in-Assessment No. KDL/DC/NC/105/Gr/-V/2016 dated 23.01.2017 issued by the Deputy Commissioner (Group V), Custom House, Kandla is accepted by the competent authority on 14.02.2017. Therefore, considering above I find that, the stand of the final assessment of the 15 bills of entry as mentioned hereinabove in Table-2 by extending the benefit of exemption of Notification No. 197/76-Cus. dated 02.08.1976 and Notification No.515/86-Cus dated 30.12.1986 which is accepted by the department becomes final. Therefore, I am inclined to hold that, the claimant is eligible for refund of excess duty amount of Page 15 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT Rs.5,41,82,641/- subject to examination of doctrine of unjust enrichment which I will discuss in detail in upcoming paras.
.......
27. In view of above discussion I find that the claimant is eligible for refund on count of time limit and merit subject to examination of doctrine of unjust enrichment. Now I will take up the count of liability to pay interest to the claimant.
.....
30. In terms of the ab0ve provision of the Section 18(4) of the Customs Act, 1962 interest has to be paid to the claimant if the duty amount is not refunded to the claimant within three months from the date of final assessment of duty subject to sub-section (5) of Section 18 under which the application shall be accompanied by such documentary or other evidence to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty or interest, has not been passed on by him to any other person. It is an undisputed fact that, bills of entry was finally assessed vide Order-in-Assessment No.KDL/DC/NC/105/Gr.-V/2016 on 23.01.2017 and after the final I assessment the claimant filed application dated 16.08.2017 on 21.08.2017 which was deficient with respect to the requisite documents.
31. It is also an undisputed fact that, till the date, the claimant has not submitted relevant Ledgers A/c [Balance Sheet, showing the Custom duty paid against relevant Bill of Entry is recoverable from Customs authority and no recovery thereof has been made from the buyers or any other persons and relevant MODVAT/CENVAT ledgers/ Register of the relevant period for verification of "No Modvat Credit has been availed by the unit against the relevant Bill of Entry"
which were necessary for the mandatory examination of the unjust enrichment before releasing the refund. Therefore the refund claim was filed by the claimant was never complete.Page 16 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT
........
33. In view of above discussion, I find that, the claimant is not eligible for the interest amounting to Rs. 17,03,05,689.63 as claimed by them. Now I proceed to examine the refund claim on count of doctrine of Unjust Enrichment.
........
38. M/s. ONGC Ltd.vide letter dated 01.06.2018 stated that, matter is very old and pertains to the year 1985- 86, it is very difficult to find out the availability of such documents in their office. However regarding copy of relevant ledgers A/c indicating the custom duty paid against Bill of entry, for retrieving the ledger account and copies of Challans, the Central Account Team and Cash & Bank (PCS) Team of Basin Finance, Vadodara, has made out all efforts including through checking of the present record room as well as old record room for several days and thereafter confirmed that records were not traceable since the matter under consideration in more than 30 years old. Claimant requested to take into consideration the records available with Customs Department for the purpose of refund of excess duty paid. Undertaking dated 31.05.2018 to this effect is attached by the claimant.
......
46. I find that, the claimant had imported the goods in year 1986-87 and subsequently filed revised claim on 12.09.1989, 14.09.1989 and 15.09.1989. I further find that, the claimant had neither submitted documentary evidences required to prove Unjust Enrichment at the time of submitting revised claim in the year 1989 nor submitted thereafter. Therefore, the claimant's say that the unavailability of records as it is old cannot be accepted as they were not filed even in the year 1989. The claimant should have preserved and submitted the respective documents to comply the mandatory procedure as the claimant is required to prove that, he has really suffered the duty incidence. He cannot be re- compensated for what he has not lost.Page 17 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT
47. As per the Section 27, 28C and 28D of the Customs Act, 1962 and other judicial pronouncements as mentioned above, the onus to rebut unjust enrichment is on the claimant until and unless the claimant satisfies the Custom authorities with relevant documents, indicating the fact that they have not passed on the duty to the customers, such a claim cannot be accepted. Further Section 28C and D of the Act provide for price of goods to indicate the amount of duty paid thereon and presumption that incidence of duty has been passed on to the buyer. Therefore until the contrary is proved, there is a presumption provided under the statute that the duty has been passed on to the buyer and the claimant i.e. M/s. ONGC Ltd. have not succeeded in rebutting the presumption. The claimant has not led any sufficient and satisfactory evidence to prove that the burden of duty incidence has not been passed on; therefore they are not eligible for refund on count of unjust enrichment.
......
:ORDER:
(i) I sanction and order to credit the amount of Rs.5,41,82,641/(Five Crore Forty One Lakh Eighty Two Thousand Six Hundred Forty One Only) claimed by M/s.
Oil and Natural Gas Corporation Limited, Head Geophysical Services, Western Onshore Basin, Makarpura Road, Vadodara-390009, to the Consumer Welfare Fund under Section 27(2) of the Customs Act,1962.
(ii) I reject interest amount of Rs. 17,03,05,689.63 claimed by M/s. Oil and Natural Gas Corporation Limited, Head Geophysical Services, Western Onshore Basin, Makarpura Road, Vadodara-390009.
(iii) The refund claim filed by M/s. Oil and Natural Gas Corporation Limited, Head Geophysical Services, Western Onshore Basin, Makarpura Road, Vadodara- 390009 for Rs.22,44,88,330.71/- (Rupees Twenty Two Crore Fourty Four Lakh Eighty Eight Thousand Three Hundred Thirty and Paise Seventy One Only) stands disposed of in above terms."
Page 18 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT10. The aforesaid extracted observation from the order impugned in this petition would clearly and unequivocally go to indicate that the authority has held that the petitioners were entitled for refund. The authority has held that the petitioners were entitled for even interest but the petitioners have, as per the reasoning of the authority passing the impugned order, failed in establishing that the duty amount is not based on end- user or consumers.
11. This Court is of the considered view that the process involved in processing the refund casts serious duty upon the concerned officer to advert to the facts pleaded before the authority for coming to the conclusion that though refund is payable but the same is required to be deposited and paid in the Consumer Fund for want of any document or other evidence to indicate that the payment of refund would not result into "unjust enrichment" to the recipient.
12. We are of the view that the order impugned unfortunately is absolutely silent qua the contention of the ONGC, which on the face of it, indicate that the machinery in question on which the duty was paid and duty was sought to be claimed as refund was not in any manner capable of being dealt with in or passing, so as to pass on the burden of duty to the consumer or end-user as there was no end-user or customer in the instant case. The authorities in uncanny avoidance to deal with this aspect has rendered the order vitiated and, therefore, decision of the authority qua depositing the amount into the consumer fund is required to be deprecated, quashed and set aside.
13. The question at this stage now arises is as to whether this Court should order refund along with interest or afford an opportunity to the authority for deciding the same. We are of Page 19 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020 C/SCA/19096/2018 CAV JUDGMENT the view that the authority may be called upon to decide the aspect of payment of refund along with interest without further insisting upon any other material and based upon the material which has already been submitted and giving liberty to the petitioner to produce any material, if they so choose, and decide to make payment of refund with appropriate interest admissible under law within a period of 30 days from the date of receipt of writ of the Court. With this observation, the petition is partly allowed. Rule is made absolute accordingly with no order as to costs.
FURTHER ORDER At this stage, Mr.Viral Shah, learned counsel for the respondent requested the Court to stay operation and implementation of this order. We are of the view that looking to the inordinate delay, even in processing refund, request does not deserve to be accepted. Even otherwise also 30 days' time is already granted for undertaking the exercise of processing the refund claim in accordance with law, after hearing the petitioner herein, therefore, this time is sufficient to take up appeal proceedings, if any. Hence, the request is rejected.
Sd/-
(S.R.BRAHMBHATT, J) Sd/-
(A. P. THAKER, J) R.S. MALEK Page 20 of 20 Downloaded on : Fri Feb 21 01:49:40 IST 2020