Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Import) ... vs M/S. Oil And Natural Gas Corporation Ltd on 7 July, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/948/2007-Mum. (Arising out of Order-in-appeal No. 378/2007/MCH/DC/Gr.V-A/06 dated 14/08/2007 passed by the Commissioner of Customs (Appeals) Mumbai-I For approval and signature: Honble Mr. M.V.Ravindran, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) ============================================================
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 : No
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?
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Commissioner of Customs (Import) Mumbai
:
Appellant
Vs.
M/s. Oil and Natural Gas Corporation Ltd.
Respondent
Appearance:
Shri A.K. Prasad Jt. CDR Authorized Representative , for appellant
Shri V.B. Dhar, Consultant, for respondent
CORAM:
Mr. M.V. Ravindran, Member (Judicial)
Mr. Sahab Singh , Member (Technical)
Date of hearing : 07/07/2011
Date of decision : /07/2011
ORDER NO.
Per : M.V. Ravindran
This appeal is filed by the Revenue against order-in-appeal No.378/2007/MCH/DC/Gr.V-A/06 dated 14/08/2007.
2. The relevant facts that arise for consideration are the respondent herein filed 40 Bills of Entries for import of capital goods to be used for Oil Exploration and Exploitation. The respondent herein filed an application for refund of the duty paid on the ground that the benefit of exemption Notification No.515/86-Cus. dated 30.12.1986 is available to them. In the first round of litigation, Tribunal directed the lower authorities to reconsider the issue afresh. The adjudicating authority rejected the refund claim of Rs.1,23,316/- and sanctioned the refund claim of Rs.1,02,97,842/- but credited the said amount to the Welfare Fund on the ground that the respondents has not passed the hurdle of unjust enrichment. Aggrieved by such an order respondent filed an appeal before the Commissioner (Appeals) who set aside the order-in-original by recording as under:-
It is seen that M/s. Oil & Natural Gas Corporation is a public sector undertaking engaged in exploration and exploitation of Hydro-Carbons. The instant refund claim pertains to duty paid on machinery/capital goods imported for using in their operation the resultant product of which is crude oil and gas. The crude oil and gas so produced are sent to the Government refinery of I.O.C. etc. at the rate fixed by the Ministry of Petroleum and Natural Gas. The Government of India Gazette Notification has been submitted to show how the pricing mechanism is operated by the Govt. and to show that the appellants have no control over the prices and no role to play in the pricing of crude oil and gas produced by them.
In view of the above observation it is clear that the present case is beyond the scope of presumption of unjust enrichment stipulated under Section 28 D of the Customs Act, 1962. The refunded amount is therefore due to the appellants and may be issued to them.
Aggrieved by such an order the Revenue is before us.
3. The learned Jt. CDR while arguing for the Revenue would submit that first appellate authority has erred in sanctioning the refund claim without considering the fact, that principles unjust enrichment is applicable to capital goods also and the onus to prove that the burden of duty has not been passed the consumers, lies on the applicant importer. It is his submission that doctrine of unjust enrichment is a crucial factor which is to be verified strictly while sanctioning a refund claim he would rely upon the following judgment :
a) Ship Gravures Ltd. Vs. Commissioner of Customs, Ahmedabad [2006 (206) E.L.T. 203 (Tri.-Delhi)]
b) Oswal Wooler Mills Ltd. Vs. Commissioner of Customs, Mumbai [2006 (205) E.L.T. 207 (Tri.- Delhi)]
c) Wool Worth (India) Ltd. Vs. Commissioner of Customs. (Port). Kolkata [2006 (205) E.L.T. 206 (Tri.- Kolkata)]
d) SRF Ltd. Vs. Commissioner of Customs, Chennai [2006 (193) ELT 186 (Tri.LB)]
e) UOI Vs. Solar Prsticides Pvt. Ltd. [2000 (116) E.L.T. 401 (SC)] It is his further submission that the first appellate authority has only held that the respondent being PSU had no control over pricing of his product is not borne out from evidence on record. It is his submission that the issue involved in this case is regarding the liability of duty on the crude oil which has been explored by the respondent and is not covered under identical Administered Price Mechanism. Hence, it is wrong to show that the prices of credit are controlled by the Government.
4. Learned Consultant on the other hand, would draw our attention to Gazette Notification issued by the Ministry of Petroleum and Natural Gas and submitted that in the said Gazette Notification dated 21.11.1997 it very clearly mentions that the price of indigenous crude oil is also to be based on cost formula wherein the PSU Oil producing companies are allowed operating cost and 15% post tax return on capital employed. It is his submission that the doctrine of unjust enrichment will not be applicable in this case as the respondent is only extracting crude oil and prices of the same are controlled by the petroleum pricing of the Ministry of Petroleum & Natural Gas. It is his submission that the APM though discontinued, was functioning in the guise of working of price by Gazette Notification as stated herein earlier. He would submit that when the assessee respondent is not allowed to charge price as is being done in the private sector, the question of unjust enrichment does not arise.
5. We have considered the submissions made at length by both sides and perused the records.
6. At the outset, we find that the learned Commissioner (Appeals) in his impugned order has not given any proper reasoning for ordering of the refund in cash to the appellant. The reasoning (as per the findings recorded as reproduced in paragraph 2) they are very sketchy and does not refer to any Gazette Notification of the Government of India, nor does it indicate the amounts are being shown by the appellant as receivable in books of accounts. We are of the considered view that the order-in-appeal is non-speaking one, and hence, without expressing any opinion on the merits of case, we set aside the impugned order and remand the matter back to the Ld. Commissioner (Appeals) to reconsider the issue afresh and come to a conclusion after following the principles of natural justice. Appeal is thus allowed by way of remand.
(Pronounced in Court on ) (Sahab Singh) Member (Technical) (M.V.Ravindran) Member (Judicial) Sm 5