Customs, Excise and Gold Tribunal - Mumbai
Cc vs Century Enka Ltd. on 5 July, 1999
Equivalent citations: 1999(85)ECR340(TRI.-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. The respondent assessees manufactured polyster filament yarn and nylon tyre cord. One of the inputs was spin finish oil. The assessees on importation of this product had paid duty without availing the benefit of Notification No. 44/90 dated 20.3.1990. They filed claims for refund of the differential duty paid under the Tariff rate and under the concessional rate prescribed by the Notification. These claims were examined but were rejected by the Assistant Commissioner on the observation that the assessees had not conclusively established that the amount of duty being claimed as refund has not been passed on to any other person. Appeals against this decision were filed before the Commissioner (Appeals). The Commissioner (Appeals) relying upon the Bombay High Court judgement in the case of Solar Pesticides 1994 (50) ECR 7 (Bom) and also on Single Judge decision of the Madras High Court in the case of Indo Swiss Synthetic Gem Co. held that the doctrine of unjust enrichment did not apply in cases where the goods were not sold but were captively consumed. He allowed the appeal and remanded the proceedings back to the lower authority. Against this common order, these appeals have been filed by the Revenue. In the appeal memorandum, it has been claimed that the cited judgement of the High Court was challenged by the department before the Supreme Court and the SLP had been admitted.
2. Shri Patwari arguing for the revenue submitted that the cited judgement of the Madras High Court was reversed in appeal by the Division Bench as per the citation in 1996 (13) RLT 379 (Mad.).
3. Shri Prakash Shah submits that even in the face of the Madras High Court judgement, the Tribunal have in a number of judgements followed the ratio of the Solar Pesticides judgment. He relied upon the judgement of the Tribunal in the case of Gujarat State Fertilizers & Chem. Ltd. v. CCE . He also relied upon the Calcutta High Court judgement in the case of CC v. East Anglia Plastics (India) Ltd. in which the High Court had followed the same view as that of the Bombay High Court in the case of Solar Pesticides. He mentioned that the Solar Pesticides judgement was followed by the Bombay High Court in the case of International Conveyors v. UOI. The appeal against this judgement filed by the Revenue was dismissed by the Supreme Court as reported in 1996 (82) ELT A. 165. He further placed reliance on the Single Member judgement in the case of CCE, Chandigarh v. R.K. Machine Tools Pvt. Ltd. (T) : 1998 (78) ECR 146 (T). On these grounds, he submits, the Collector (Appeals)' order sustains.
4. I have considered the submissions made and have seen the cited judgements.
5. The fact that the appeal has been filed by the Revenue against the Solar Pesticides has not prevented various Benches of the Tribunal in following the ratio thereof. The cited judgement of the Madras High Court gave the contrary view. The comparative merits of both the judgements were examined by the Single Member in the judgement cited above. (R.K. Machine Tools Pvt. Ltd.) In its judgement, the Tribunal observed that on perusal of the wording of the Section and the use of the phrase "such goods", the benefit was available to the assessees. Paragraphs 8 & 9 of the said judgement are reproduced below:
I have carefully considered th6 pleas advanced from both the sides. I observe that the weight of the authoritative opinion on this issue is more in favour of the assessees rather than of the Revenue. There are judgements of two High Courts namely Bombay and Calcutta as regards the single judgement of Madras High Court in favour of the Revenue. Apart from the foregoing authoritative opinion of the view that Section 28D, on its plain reading, favours the assessees. For the sake of convenience that Section is reproduced below:
28D. Presumption that incidence of duty has been passed on to the buyer -Every person who has paid the duty on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods.
It is clear from the aforesaid provisions' that presumption that incidence of duty is passed on to the buyer is only when "such goods" are sold to another person i.e. to the buyer. The question is what is the meaning of "such goods"? The expression "such goods" will obviously derive the meaning from earlier reference to the goods in the said provisions. That earlier reference is in the earlier part of Section 28D which says that every person who has paid the duty on any goods under this Act. In other words, the goods on which duty has been paid have to be sold "as such" to another person i.e. to a buyer before raising a presumption that the duty has been passed on to the buyer. If the goods "as such" which have borne the duty under the Act are not sold but have been used in manufacture of other goods then the provisions of Section 28D clearly will not be avail -able for raising the presumption.
6. Following the ratio of the judgement, I find that the order of the Collector (Appeals) sustains. Accordingly, these appeals from the Revenue are dismissed.
(Pronounced in court).