Customs, Excise and Gold Tribunal - Delhi
Finolex Industries Ltd. vs Commissioner Of Customs on 16 January, 2004
Equivalent citations: 2004(166)ELT230(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. The appellants are importers and manufacturers. They imported certain consignments of Ethylene dichloride and cleared the same under four Bills of Entry which were provisionally assessed to customs duty on the basis of quantities mentioned in the relevant Bills of Lading. The assessment was obviously under the provisions of Sub-section (1) of Section 18 of the Customs Act and the clearance of the goods was on payment of duty so assessed. Later on, the Bills of Entry were finally assessed on the basis of Ullage Survey Report, which showed lesser quantities vis-a-vis Bills of Lading. Accordingly, the customs duty payments made by the party became excessive and, consequently, refund claims were filed with the department. These claims were rejected on the ground that the claimant had not shown that the incidence of duty had not been passed on to any other person. In other words, the refund claims were held to be hit by unjust enrichment. When the original authority held so, the party preferred appeal to the Commissioner (Appeals) and the latter upheld the lower authority's decision by relying on the Supreme Court judgment in UOI v. Solar Pesticides Pvt. Ltd. [2000 (116) E.L.T. 401 (S.C.)]. Hence this appeal.
2. Heard both the sides and considered their submissions. Ld. Counsel for the appellants has made the following points :-
(a) Any claim for refund consequential to finalisation of a provisional assessment of imported goods to customs duty is not governed by anything contained in Section 27 of the Customs Act and, therefore, the doctrine of unjust enrichment is inapplicable.
(b) The cost of final product (PVC resin) manufactured out of raw materials including Ethylene dichloride finally assessed was not different from the cost provisionally assessed and, therefore, it cannot be said that the incidence of customs duty on Ethylene dichloride has passed on to other persons.
3. Ld. Counsel has relied on the Supreme Court's decision in Commissioner of Central Excise, Chennai v. T.V.S. Suzuki Ltd. [2003 (156) E.L.T. 161 (S.C.) which followed the Court's judgment in Mafatlal Industries v. U.O.I. [1997 (89) E.L.T. 247 (S.C.)]. He has also relied on the Tribunal's decision in Alcatel Modi Net Works Systems v. CC, New Delhi [2000 (117) E.L.T. 522 (Tribunal)].
4. Ld. DR has submitted that, in their appeal filed with the Commissioner (Appeals), the appellants had relied on the Bombay High Court's decision in Solar Pesticides Pvt. Ltd. v. U.O.I. [1992 (57) E.L.T. 201 (Bombay)]. The High Court's decision was reversed by the Apex Court vide 2000 (116) E.L.T. 401 (S.C.) which has been followed by the Commissioner (Appeals) in the instant case. DR has further pointed out that, as the case of Mafatlal Industries (supra) involved only Central Excise issues, the decision in that case may not be applicable to the instant Customs case. In Solar Pesticides Pvt. Ltd, (supra), the Apex Court was dealing with a Customs issue and hence the ruling rendered in that case should be applied.
5. I have examined the submissions.
The question to be settled in this case is whether the refund claims for customs duty filed by the appellants consequent to final assessments of the relevant Bills of Entry are hit by the bar of unjust enrichment or not. In Para 95 of the judgment rendered by the Supreme Court in the case of Mafatlal Industries, it was held that any refund consequent upon adjustments under Sub-rule (5) of Rule 913 of the Central Excise Rules, 1944 would not be governed by Section 11B of the Central Excise Act. It is Section 11B, which embodies the doctrine of unjust enrichment insofar as refund claims for central excise duty are concerned. Before me are the refund claims for customs duly consequent to final assessment under Sub-section (2) of Section 18 of the Customs Act. The provisional assessment had been made under Sub-section (1). On a comparison of the provisions contained in Sub-section (1) of Section 18 of the Customs Act with those contained in the Sub-rule (5) of Rule 9B of the Central Excise Rules, I find that the quantity of goods mentioned in Bill of Lading could be one of the relevant considerations for provisional assessment under Section 18(1) of the Customs Act. This provision provides for further inquiry by the proper officer for assessing the duty. It was on such further inquiry that the Ullage Survey Reports were obtained, on the basis of which the assessments were eventually finalised. In view of this position under the Customs Act, I think, any binding case law applicable to Sub-rule (5) of Rule 9B of the Central Excise Rules, 1944 should equally be applicable to subsection (1) of Section 18 of the Customs Act. In the result, what was held in Para 95 of the Apex Court's judgment in Mafatlal Industries should be applicable mutatis mutandis to the refund claims filed by the appellants. As a matter of fact, this view appears to have been taken by this Tribunal in the case of Alcatel Modi Net Works Systems (supra). Other points raised in this appeal are only of academic interest.
6. In Mafatlal Industries, the ruling was given by a Bench of 9 Judges of the Supreme Court. The judgment in Solar Pesticides (supra) was rendered by a bench of 3 Judges of the Court. Following the ratio contained in Para 95 of the Supreme Court's judgment in Mafatlal Industries, which has been followed by this Tribunal in Alcatel Modi Net Works Systems (supra), which decision of the Tribunal has been affirmed by the Supreme Court vide 2002 (146) E.L.T. A96, I hold that the refund claims in question are not hit by the bar of unjust enrichment. The appellants are entitled to get cash refund of the duty paid in excess. It is ordered accordingly. The impugned order is set aside. The appeal stands allowed.