Customs, Excise and Gold Tribunal - Delhi
P.K. Himmatsingka And Co. vs Commissioner Of Cus. on 28 September, 1999
Equivalent citations: 2000(115)ELT108(TRI-DEL)
ORDER J.N. Srinivasa Murthy, Member (J)
This is the party's appeal against the above captioned impugned order dated 7-1-1989 praying for setting aside the same and for the sanction of refund.
1. The facts of the case in brief are that the appellant received a telex order on 18-3-1989 NOIC 'M' duly countersigned by the Commander Dy. Director of Divine and undersea activities. Naval Headquarters, New Delhi - 11 for the supply of 20 number of 30 HP 'A' JOHNSON outboard motors at the rate of Rs. 49,750/- each. As it was required urgently the appellants immediately arranged for the import of the same from M/s. Pantime Ltd., Hongkong (by Telex and Telephone) as a result of which they were despatched on 22-3-1989 vide Air India Way Bill No. 098-5276 4865. Immediately on receipt of the notice in that regard, the Bill of Entry No. 217979 was filed by the appellant on 27-3-1989 itself along with the suppliers invoice No. 3172, dated 25-3-1989 and suppliers packing specification, and requested for the release of the goods free of custom duty under Notification No. 195/76-Cus, dated 2-8-1976, as amended. The outboard motors were for fitment by the Indian Navy on their ships. The goods were examined on 30-3-1989 by the Delhi Customs. The letter dated 30-3-1989 from the Air Admiral, Asstt. Chief of Naval Staff (Operations) was also filed with the Bill of entry with a request that the same may be passed free of duty as per the certificate produced. There was a delay in granting such clearance even though necessary documents establishing the claim for duty free entry, were produced. There was a pressure from naval authorities for the goods. As there was no indication as to when the goods will be released, the appellant decided to pay the duty, take clearance and then claim refund of the said duty amount paid. Under TR6 Challan No. 8906946, the appellant paid the Custom duty of Rs. 2,75,170.40 and took delivery of the goods and subsequently handed over to the naval authorities. The appellant filed a refund claim on 18-4-1989 before the Asstt. Commissioner of Customs claiming refund along with all the documents referred above. It was rejected under the order dated 25-9-1989, and. the appeal preferred against it was dismissed by the Collector of Customs. The appellant preferred an appeal to the Tribunal under No. C/109/91-B2, which was allowed on 25-6-1997 and the refund claim was upheld. In spite of that, the Asstt. Commissioner rejected the refund claim, which is upheld by the Commissioner (Appeals). Hence this appeal.
2. In support of the appeal it is urged that the certificate issued by the naval authorities is misinterpreted that the duty was borne by them. On the principle of unjust enrichment, the claim was rejected under Section 28(c) & (d) of the Customs Act. The appellant has produced the purchase order dated 17-3-1989, Telex order dated 18-3-1989, the certificate dated 31-3-1989 of the Naval Headquarters and its letter dated 3-4-1989 releasing a cheque for Rs. 10,34,800/- and its photocopy, the certificate of the chartered accountant dated 4-4-1998 about the appellant's accounts, the letter dated 21-4-1989 No. DD2531 on the basis of which the claim has been rejected and the letter of the appellant dated 28-5-1988 to the Naval authorities and the reply dated 2-7-1998 under No. 622. Still the lower authorities have rejected the refund claim without considering them and failed to apply their mind. The letters dated 2-7-1998 and 28-5-1998 are self-explanatory and the question of unjust enrichment does not arise. If there was any doubt it should have been verified with the Naval Headquarters. The duty is paid on 15-4-1989. Paragraph 2 under page 14 and 15 of the order of the Tribunal has clearly held that the exemption applies under Notification 195/76 to the instant case on hand in view of the certificate. There was no reason to reject the refund claim. On behalf of the respondent, it is submitted that the orders from lower authorities are proper and correct.
3. The point to be considered is whether this is a fit case to allow the appeal? My finding thereon is in the affirmative.
4. Perused the orders of the lower authorities, the correspondence between the appellant and the Naval authorities, the Addl. Collector of Customs, Imports, and the order of the Tribunal in C/109/91-B2. Where there is a clear decision that - "in view of the certificate issued by the Naval authorities, the exemption under 195/86 cannot be denied." The appellant have been extended this extension subsequently for the same goods under the same notification under the bill of entry that Rotation No. 90/13448, dated 22-2-1990. There is a specific finding that the impugned goods are entitled to the exemption under Notification 1/95 as fitments to ships. This clearly supports the case of the appellant. The order is dated 25-6-1997. The letter dated 28-5-1992 by the appellant to the naval officer in-charge INC Adayar, Fort, St. George, Chennai shows that the supply order under which 20 numbers of 30 HP Johnson Outboard Motors on supply order was received on without custom duty basis as Indian Navy was exempted from paying custom duty by Notification 195/76, and since the goods were required urgently and the customs authorities were taking time in clearing the same, the goods were got released by paying custom duty of Rs. 2,72,170.40 by the appellant thinking to claim it back later on from the customs authorties. The customs department after processing the refund claim sent a letter to the Navy saying that the order was placed with the appellant without customs duty basis and no custom duty was paid by the Indian Navy to them. In reply to that letter on 2-7-1998, the Naval authorities namely the Commander Chief Staff officer for capital NOIC (TN) has confirmed that no custom duty was paid by Indian Navy to the appellant against the Order No. 001, dated 18-3-1989. As contended by the appellant, these two documents clearly makes out that the appellant has borne the customs duty paid and it is not passed on to the Naval authorities. Apart from that, there is no question of payment of customs duty in view of the orders of the Tribunal in Appeal No. C/109/91-B2. So under these circumstances, it was not proper on the part of the lower authorities to reject the refund claim.
5. The decision in the order-in-original is based on the letter dated 21-4-1989 from Rear Admiral, R.B. Suri. Asst. Chief of the Naval Staff to the Addl. Commissioner of Customs, Imports, IGI Airport, Cargo Terminal, New Delhi shows the burden of duty was borne by the Naval Headquarters not by the company (appellant), as it is requested for the refund of the Customs duty to the appellant company for onward return to the Navy. The Commissioner (Appeals) has rejected the appeal on the ground that the purchase order is silent about the custom duty and there is no calculation of the landed cost separately to demonstrate that the custom duty was not covered in the value. The orders of the Tribunal is also considered and held that this is a case of consequential refund. When there is a Notification No. 195/76, dated 2-8-1976 exempting the payment of customs duty by the Indian Navy on the outboard motors for fitment on the ships, all these things did not arise. In support of the letter of Rare Admiral to the Addl. Commissioner of Customs Imports, there is nothing to show that they have paid the amount to the appellant to pay the Customs duty of Rs. 2,75,170.40. The letter dated 2-7-1998 by the Commander clearly states that no Customs duty was paid by the Navy to the appellant. So there is a positive evidence in support of the evidence that the burden of the duty is not passed on to the naval authorities. The letter dated 2-7-1998 prevails over the letter dated 21-4-1989. So under these circumstances, the case of the appellant has to be, and is accepted. The orders of the Tribunal in E/561/98-NB in the case of DLF Cement Ltd. v. CCE, Jaipur 1999 (114) E.L.T. 646 (Tribunal) deals with the Modvat credit on structures and parts, and parts of programmable logic controller on fire extinguishers by the appellant company who are engaged in the manufacture of cement falling under Chapter 25 of the Schedule under tariff heading, which has no relevance to the instant case on hand. In view of the above discussions, I answer the point raised in the affirmative and pass the following order.
ORDER For the reasons discussed above, the orders of the lower authorities are set aside, and the appeal is allowed with consequential relief according to law.