Customs, Excise and Gold Tribunal - Bangalore
Bombay Trading Co. vs The Commissioner Of Customs on 9 February, 2007
Equivalent citations: 2007(117)ECC246, 2007ECR246(TRI.-BANGALORE), 2007(213)ELT177(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed in respect of Order-in-Appeal No. 209/2006 dated 23.8.2006 passed by the Commissioner of Customs (A), Cochin.
2. The appellants imported three consignments of toys, clocks, artificial flowers and pocket torches after filing three Bills of Entry. The declared value of Rs. 14,79,304/- was not accepted. The Original Authority enhanced the value to Rs. 31,06,897/- and imposed redemption fine of Rs. 6,25,000/- and personal penalty of Rs. 1,75,000/-. The appellants cleared the goods on payment of duty, fine and penalty. The duty paid comes to Rs. 18,71,312/-. The appellants challenged the orders of the lower authority before the Commissioner (A). The Commissioner (A) in his order dated 10.10.2003 set aside the order of the lower authority loading the value of the goods imported and imposing fine and penalty. Consequent, to the favourable order of the Commissioner (A), the appellant claimed a refund of Rs. 17,62,044/-. The Asst. Commissioner while sanctioning the refund of fine and penalty amounting to Rs. 8,00,000/- rejected the refund of duty on the ground that the appellant did not conclusively prove that the incidence of duty had not been passed on to any other person. A certificate was produced from the Chartered Accountant. Since that certificate was not satisfactory to the Revenue, another certificate was produced. The Asst. Commissioner rejected the refund in view of the discrepancies between the two certificates of the Chartered Accountant and he came to the conclusion that the appellants had not discharged the burden of proof that the incidence of duty has not been passed on to the buyer. Aggrieved over the order of the lower authority, the appellants approached the Commissioner (A). The Commissioner (A) rejected the appeal. The appellants are aggrieved over the impugned order.
3. Smt. Padmini Sundaram, learned advocate appeared for the appellants. She urged that as per the enhanced value and actual duty paid, the landed cost comes to around Rs. 54,38,239/-. However, the goods have been sold to Rajinder Trading for Rs. 23,84,836/-(excluding sales tax) Thus the goods have been sold under great loss and there cannot be any question of passing on the incidence of duty to the buyer. She also relied on the following decisions of the Tribunal.
(i) Agrotech Foods Ltd. v. CC, Bangalore 2005 (192) ELT 273 (Tri.-Bang.)
(ii) Toyota Kirloskar Motor Ltd. v. CCE, Aurangabad
4. The learned JDR Shri K. Sambi Reddy reiterated the impugned Order-in-Appeal.
5. We have gone through the records of the case carefully. The lower authority has already refunded the fine and penalty. The dispute is only with regard to the refund of duty. The main objection of the lower authority is that there are two certificates of the Chartered Accountant, which differ in particulars. It is stated that the certificate dated 10.11.2003, the sale value is shown as Rs. 21,44,890/-. However, in the certificate dated 23.8.2004 the sale value is shown at Rs. 23,84,836/-. The difference comes to Rs. 2,39,946/-. In our view rejecting the entire refund amount to the tune of Rs. 9,62,044/- on the ground of discrepancy of Rs. 2,39,946/- does not appear to be correct. The appellants have produced 5 invoices whose particulars are as follows.
Invoice No. /date Item Sold to Amount in Rs.
310/24.10.03 Pocket size torches Rajendra Trading Co., 28,800/-
309/23.10.03 Stuff Toys Rajendra Trading Co., 2,49,543/-
287/03.05.03 Pocket size torches Rajendra Trading Co., 69,264/-
272/22.03.03 Stuff toys Rajendra Trading Co., 6,33,869/-
271/07.03.03 Pocket Size torches Rajendra Trading Co., 14,97,600/-
Total 24,79,076/-
From the above particulars, it is seen that the goods have been sold at Rs. 24,79,076/-. It is on record, that the department enhanced the value of goods to Rs. 31,06,897/-. It is also on record that the duty paid on the enhanced value is Rs. 18,71,312/-. If the appellant by selling the goods had passed on the duty burden to the buyer, his selling price cannot be less than Rs. 31,06,897/- plus Rs. 18,71,312/- equal to Rs. 49,78,209/-. However, the invoices show the total sale price at Rs. 24,79,076/-. That means the appellant had sold the goods at a great loss and it is very clear that the duty burden has not at all been passed. The appellants had produced necessary transport receipts in support of the above sale along with CTO papers. They had also produced copies of income tax papers showing outstanding amounts from Rajendra Trading Co., for the entire year, which includes the above payment. It should be borne in mind that the Chartered Accountant issues his certificate only on the basis of the documents produced by the appellants. When these clearly indicate that the goods have been sold much below the landed cost, it is very clear that the duty burden has not been passed on to the buyer. Thus, there cannot be any question of unjust enrichment. Hence, the appellants are entitled for the refund of the amount, which is equal to the difference between the duty actually paid and the duty payable on the basis of the transaction value. The discrepancy in the Chartered Accountant's certificate cannot come in the way of arriving at a decision. There is no evidence to show that the invoices produced by the appellants are fake. In these circumstances, we allow the appeal with consequential relief, if any.
(Pronounced in open Court on 9 FEB 2007)