Customs, Excise and Gold Tribunal - Delhi
Hi Line Pens (P) Ltd. vs Commissioner Of Customs on 3 December, 2002
Equivalent citations: 2003(85)ECC633
JUDGMENT V.K. Agrawal, Member (T)
1. The issue involved in this Appeal filed M/s. Hi Line Pens (P) Ltd., is whether the principle of unjust enrichment is applicable to the refund of Customs duty claimed by them.
2. Shri Naveen Mullick, learned Advocate, submitted that the Appellants manufacture writing instruments for which they import various type of parts; that accordingly they imported metal parts which were cleared on payment of duty; that subsequently they made the request for converting the Bill of Entry from standard rate of duty to Nil rate of duty under DEEC Scheme under Notification No. 79/95-Cus; they filed four refund claims on the ground that Bills of Entry had been got converted and the goods had been cleared by the Customs under duty free advance licence, procured by them from market on payment of premium; that the Assistant Commissioner, under the Adjudication Orders Nos. 118-121/99 dated 16.1.99 sanctioned the refund claims but ordered the same to be credited to the Consumer Welfare Fund observing that the duty paid had been passed on to the Customers; that the Commissioner (Appeals) also under the impugned Order, rejected their Appeal holding that they had added the element of duty in their cost while computing the value of their products and that nowhereless price for the products manufactured out of the nil duty paid raw material had been Indicated.
3. The learned Advocate, further, submitted that element of duty paid by them was never taken into consideration while working out the value of their final products; that at the time of clearance of the goods, they were aware that Customs duty paid by them was in excess and they had to seek refund from the Department; that accordingly there was no question of taking such amount into consideration while working out the value of their final products; that for these reasons, even their Balance Sheet for the relevant period showed the amount of duty paid in excess as recoverable from the Customs; that they had also produced the Certificate of the Chartered Accountant confirming about non-passing of incidence of duty; that in addition they had filed a statement disclosing therein the element of premium paid by them for procurement of advance license and which was taken into consideration for working out the value of the writing instruments. He also submitted that for the purpose of the calculation of duty, the rate for conversion of foreign currency is the rate prescribed in the Notification for the month concerned; that, however, for booking of the amount in books of account, the prevailing bank rate is considered; that there is always a difference of rates as prescribed under the Notification and the bank rate which keep on varying; that for example the rate of US $ is Rs. 48,60 for the month of October 2002 under Notification No. 61/2002 NT Customs dated 25.9.2002 whereas as per Economic Times dated 18.10.2002, the rate of conversion is Rs. 48.52 p; that, therefore, there will be difference between the bill of entry and the books of account. He also drew our attention to a statement of Imports during the year 1996-97 (Page 168 of the Paper Book) according to which Customs Duty was shown as Nil from Serial No. 4 and the total duty amount was only Rs. 1,39,529,98p and contended that it is thus apparent that the Appellants had not taken the incidence of Customs duty in the costing of the finished products.
4. Countering the arguments, Shri Atul Dixit, learned Senior Departmental Representative, submitted that the difference in conversion rate of foreign exchange would not explain the difference in the amount taken by the Appellants in their costing as the difference between the two rates is only of some paise. He explained that one Bill of Entry shows the invoice value of goods as GBP 25100 which at the rate of Rs. 55.79 comes to Rs. 14,00,329; that the relevant invoice is No. A 025353; that while taking this into account in their calculations, in the Chart at page 366 of the Paper Book, the translation amount is shown as Rs. 15,04,243 which is higher; that it is thus apparent that the costing of the finished products has been done on a higher value than shown in the invoice which means that the incidence of duty was passed on to the customers. In reply the learned Advocate mentioned that none of the lower authorities have dealt with any of the submissions made by them. He further referred to Para 21 of the Supreme Court's judgment in the case of Union of India v. Solar Pesticides Pvt. Ltd., 2000 (68) ECC 25 (SC) : 2000 (116) ELT 401 (SC) where Supreme Court, while not accepting the contention of the Respondents that in case of captive consumption of Imported goods, it would be impossible for the assessee to establish whether the duty component has been passed on to the buyers, referred to the appeal in respect of Surya Roshni Ltd who had produced a certificate from the Chartered Accountants giving cost of the final product and Commissioner (Appeals) found as a fact that the component of excess customs duty paid on the imported raw materials had not gone into the costing of the finished product. He, therefore, contended that the Certificate of Chartered Accountant submitted by them should be considered by the Department. The learned Senior Departmental Representative pointed out that the Supreme Court did not examine the question of correctness of the said finding of the Commissioner (Appeals) and only observed that "it should be possible for the importer to show and prove before the authorities concerned that the incidence of duty on the raw material, in respect of which refund is claimed, has not been passed on by the importer to any body else." The learned Senior Departmental Representative contended that the Appellants have not succeeded in showing that the incidence of duty had not been passed on by them. 5. We have considered the submissions of both the sides. We observe that the Appellants have submitted Chartered Accountant's Certificate, Balance sheets, costing of the material, statement regarding premium paid for procuring advance licence in support of their contention that the incidence of Customs duty paid by them on the imported materials has not been passed on to their customers. We are of the view that the documents/material submitted by them has not been examined by the lower authorities as the Assistant Commissioner has only recorded in his findings that "the representative of the claimant had at the time of personal hearing admitted that the costing of the product included duty paid on inputs and the duty paid has been passed on to their ultimate customers, buyers." The Appellants have claimed that they had never accepted before the Adjudicating Authority that duty had been recovered from the customers. The learned Commissioner (Appeals) also, it appears, has been influenced by the observation of the Supreme Court in Mafatlal Industries v. UOI, 2002 (83) ECC 85 (SC) : 1997 (89) ELT 247 to the effect that "ordinarily no manufacturer would sell at less than the cost price plus duty" coupled with his finding that Appellants have accepted that "in general the element of customs duty paid is taken into account while working out the costing of the finished product in which the imported raw material have been used." Accordingly we feel that the documents/materials submitted by the Appellants need a close examination by the Jurisdictional Adjudicating Authority to adjudicate the matter afresh in the light of the materials submitted by the Appellants and after affording a reasonable opportunity of hearing to them and pass a well reasoned and speaking Order in accordance with law.
6. The Appeal is thus allowed by way of remand.