Custom, Excise & Service Tax Tribunal
A.S. Lari & Co vs Commissioner Of Customs (Import), ... on 11 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. IV APPEAL No. C/574/08 (Arising out of Order-in-Appeal No. 136(CRC)/2008(JNCH) dated 3.4.2008 passed by Commissioner of Customs (Appeals), Mumbai-II) For approval and signature: Hon'ble Mr. P.G. Chacko, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== A.S. Lari & Co. Appellant Vs. Commissioner of Customs (Import), Nhava Sheva Respondent Appearance: Shri Dhirendra Pratap Singh, Advocate, for appellant Shri N.A. Sayed, Authorised Representative (JDR), for respondent CORAM: Hon'ble Mr. P.G. Chacko, Member (Judicial) Date of Hearing: 11.6.2009 Date of Decision: 11.6.2009 ORDER NO.................................
After examining the records and hearing both sides, I find that the lower authorities have declined cash refund of an amount of Rs.1,65,000/- to the appellant on the ground of unjust enrichment. It was on the strength of an order of the Commissioner (Appeals) that the assessee, who was the appellant before the appellate Commissioner, claimed refund of the above amount comprising fine and penalty. The original authority sanctioned the refund but credited the amount to consumer welfare fund. This decision was affirmed by the Commissioner (Appeals). In the present appeal, the assessee submits that there was no question of passing on the incidence of duty to anybody else as they suffered huge loss in respect of the goods in question as evidenced by their Chartered Accountant's certificate. According to the appellant, the bar of unjust enrichment is not applicable to the facts of this case. They have relied on certain decisions of the Tribunal. Today, their counsel has referred to the following decisions:-
* Brindavan Tex Processors Pvt. Ltd. vs. CCE, Bangalore 2006 (196) ELT 61 (Tri.-Bang.) * CCE, Hyderabad vs. Talsila Pharmaceuticals (P) Ltd. 2007 (210) ELT 229 (Tri.-Bang.) * CCE, Guntur vs. Empee Sugar & Chemicals Ltd. 2007 (211) ELT 293 (Tri.-Bang.) * Bombay Trading Co. vs. CCE, Cochin 2007 (213) ELT 177 (Tri.-Bang.) * RCC (Sales) Pvt. Ltd. vs. CCE, Hyderabad-IV 2008 (223) ELT 53 (Tri.-Bang.) * Paper Products Ltd. vs. CC, Mumbai-I 2009 (233) ELT 227 (Tri.-Mumbai).
2. The learned DR, at the outset, submits that the bar of unjust enrichment is applicable to a claim for refund of fine or penalty as much as to one for refund of duty in the light of the Supreme Court's decisions in Mafatlal Industries Ltd. vs. UOI 1997 (89) ELT 247 (SC) and Sahakari Khand Udyog Mandal Ltd. vs. CCE 2005 (181) ELT 328 (SC). In this connection, he has also relied on United Spirit Ltd. vs. CC, Nhava Sheva 2008 (228) ELT 360 (Tri.-Mumbai). The learned DR has also referred to a profit & loss of the company, wherein redemption fine and penalty were shown as items of expenditure. It is submitted that these items of expenditure should be presumed to have been reckoned in the costing of excisable products thereby paving the way for transmission of the incidence of duty to the buyers.
3. I have given careful consideration to the submissions. It is not the case of the appellant that the bar of unjust enrichment is not applicable to a claim for refund of fine or penalty and, therefore, the case law cited by the DR is not relevant. The tenor of the appeal is that the above principle is otherwise applicable to any refund. However, a strong resistance has been put up against crediting of the amount to the consumer welfare fund on the ground that the fine or penalty paid in excess by the appellant was not passed on to any other person. The profit & loss account pertaining to the relevant bill of entry covering import of dry dates shows an amount of Rs.2,90,000/- as expense on account of fine and penalty. On the credit side of this account, there is net loss of Rs.10,34,668/-. On the same side of the account, there is a total income of over Rs.6 lakhs by way of sales. From this, it would appear that some of the expenses shown on the debit side might have been passed on to the buyers of the goods reflected on the credit side. In this scenario, there is an onerous burden on the party to show that the burden of fine and penalty was not passed on to the buyers of the goods. In my view, there is another presumption against the appellant, which is that a personal penalty cannot be passed on to others. If a personal penalty is passed on to another person, it would amount to an innocent person being punished, which is anathema to criminal jurisprudence. I have also gone through the decisions cited by the Advocate. In almost all those cases, after examining the documentary evidence adduced by the parties, the Tribunal found that the burden of refund claimant was discharged. The instant case is factually distinguishable.
4. In the result, the impugned order is sustained and this appeal is dismissed.
(Pronounced in Court) (P.G. Chacko) Member (Judicial) tvu 1 5