Custom, Excise & Service Tax Tribunal
M/S. Acalmar Oils & Fats Ltd vs Cce, Visakhapatnam on 4 January, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court II
Date of Hearing: 04/01/2011
Date of decision:04/01/2011
Appeal No.C/561/09
(Arising out of Order-in-Appeal No.13/2009 V-II Cus. dt. 9/6/2009 passed by CC,CE&ST(Appeals), Visakhapatnam)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Acalmar Oils & Fats Ltd.
..Appellant(s)
Vs.
CCE, Visakhapatnam
..Respondent(s)
Appearance
Mr. K. Krishnamurthy, Advocate for the appellant.
Mr. K.S. Chandrasekar, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial)
FINAL ORDER No._______________________2011
Per M.V.Ravindran
This appeal is directed against Order-in-Appeal No.13/2009 V-II Cus. dt. 9/6/2009.
2. The relevant facts that arise for consideration are that the appellants have filed two Bills of Entries No.600136/31.1.2006 and 600138/31.1.2006 on 31/1/2006 for clearance of Crude Palm Oil at concessional rate of duty as per Notification No.21/2002-Cus. dt. 1/3/2002, on tariff value of USD 415 PMT. Both bills of entry, including one under DEPB scheme, were assessed provisionally. With effect from the same date i.e. 31/1/2006 vide Notification No.7/2006-Cus (NT) the Government reduced the tariff value Crude palm oil from USD 415 PMT to USD 412 PMT. In absence of communication as regards to issuance of the notification the bills were provisionally assessed at the rate of USD 415 PMT. The Asst. Commissioner, on filing of refund claims by the appellants, sanctioned the refund of excess duty collected, by way of speaking orders, holding that the bar of unjust enrichment was not applicable in the present case since the goods were in the warehouse on the date of issuance of amended Notification and passed out of charge was given on the same date. These orders were reviewed by the Commissioner of Customs & Central Excise, Visakhapatnam-II Commissionerate and made an appeal before the Commissioner(Appeals), Visakhapatnam with a prayer to remand the matter to Original Adjudicating Authority to re-adjudicate the case and to pass appropriate orders. The ld. Commissioner(Appeals) in his Orders-in-Appeals No.01 & 02/2008 V-II D Cus. dt. 4/3/2008 allowed the appeals and directed the original authority to consider the aspect of unjust enrichment and pass appropriate orders. The Asst. Commissioner in remand held that the claimant's contention in respect of unjust enrichment, does not have any force as they have not adduced any evidence to rebut the unjust enrichment clause in the present case and ordered for recovery of the refunded amount and to credit the same to the Consumer Welfare Fund. Aggrieved by the order of the adjudicating authority, assessee filed an appeal before the ld. Commissioner(Appeals). The ld. Commissioner(Appeals) after following the principles of natural justice and considering the oral and written submissions made before him, came to the conclusion that the refund of duty is governed by the provisions of Section 27 of the Customs Act, 1962 which stipulates for scrutinizing of the refund claim in terms of unjust enrichment. Coming to such conclusion, ld. Commissioner(Appeals), relying upon the judgment of the Hon'ble Supreme Court in the case of Solar pesticides Vs. UOI [2000(116) ELT 401 (SC)], held that the appellant has failed to produce any contrary evidence that the incidence of duty has not been passed on to the customers. Coming to such conclusion, he dismissed the appeal filed by the appellant. Hence, this appeal.
3. Ld. Consultant appearing on behalf of the appellant submits that the ld. Commissioner(Appeals) has misdirected himself. It is the submission that the Bills of Entries were dt. 31/1/2006 and they were provisionally assessed and on the very same day, they were finally assessed being there was reduction in the tariff on the same day. It is his submission that they have filed refund claims within time and the provisions of Section 18 of the Customs Act, 1962 for the provisional assessment will be applicable for the issue in common during the relevant period. It is his submission that Section 18 of the Customs Act underwent an amendment on 13/7/2006 wherein unjust enrichment clause was inserted. He would submit that the judgment of Hon'ble Supreme Court in the case of TVS Suzuki Ltd. Vs. CCE [2003(156) ELT 161 (SC)] will apply in this case.
4. Ld. DR on the other hand would submit that the assessee has to pass the test of unjust enrichment before any amount is refunded to him. He is relying upon the findings of the Commissioner(Appeals).
5. I have considered the submissions made by both sides and perused the records.
6. It is undisputed that the appellant had filed bills of entries on 31/1/2006, which were provisionally assessed on the value of USD 415 PMT of the imported goods. On the very same day, vide Notification No.7/2005-Cus. (NT) dt. 31/1/2006, the tariff value was reduced from USD 415 to USD 412 PMT. The bills of entries were finally assessed on the very same day i.e. 31/01/2066 giving the benefit of the notification to the appellant. Appellant filed refund claims on 30/6/2006 as per the provisions i.e. provisions of Section 27 read with Section 27 read with Section 18 of the Customs Act, 1962.
7. The findings of the ld. Commissioner(Appeals) on the above is under:-
"I have gone through the records of the case and the submissions made by the appellants. The refund of duty is governed by the provisions of Section 27 of the Customs Act, 1962 which stipulates for scrutinizing all refund claims in terms of unjust enrichment. In the instant case, there is no dispute that the refund claim was submitted within the stipulated time period. With regard to the refund claim, Section 27(2) of the Customs Act, 1962 says that any duty or interest, if any paid, is refundable to the applicant provided the amount of duty and interest, if any, paid on such duty as determined by the Asst. Commissioner of Customs under the foregoing provisions of Section 27(2) ibid, shall, instead of being credited to the fund, be paid to the applicant, if such amount is relatable to, among others, the duty and interest, if any, paid on such duty paid by the importer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person. The primary responsibility of the appellant is to prove that the incidence of duty has not been passed to the end-customer. It is to pertinent mention the case of M/s. Solar Pesticides Vs. UOI reported in 2000(116) ELT 401 (SC) wherein the Apex Court held that the expression 'incidence of such duty' in relation to it being passed on to another person would take within its ambit, not only passing of the duty directly to another person but also cases, where it is passed on indirectly. This clearly indicates that even if the imported goods are not meant for sale directly to the customer but for captive consumption by the importers in manufacture of refined oil. The appellant has also failed to produce any concrete evidence to show that the incidence of duty has not been passed to the customer. As per Section 28D of the Customs Act, 1962 "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". I also agree with the case laws quoted by the lower adjudicating authority which are relevant to the present case. In view of the above findings, I pass the following order.
ORDER
I uphold the impugned order and the appeal is dismissed."
8. It can be seen from the above reproduced findings that the ld. Commissioner(Appeals) has not addressed himself to the issue in hand in a proper perspective. It is undisputed that the provisions of Section 18 talks about provisional assessment of bills of entries and any refund or shortage of duty due to finalization of bills of entries has to be made good. In this case, the entire exercise of provisional assessment of bills of entries and finalization of the same took place on 31/1/2006. It is also seen that during the relevant time, Section 18 of the Customs Act did not have the clause of unjust enrichment. Clause of unjust enrichment was inserted in Section 18 w.e.f 13/7/2006 which reads as under:-
"(5) The amount of dutyrefundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to -
(a) the duty and interest, if any, paid on such duty paid by the importer, or the exporter, as the case may be, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(b) the duty and interest, if any, paid on such duty on imports made by an individual for his personal use;
(c) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(d) the export duty as specified in section 26;
(e) drawback of duty payable under sections 74 and 75."
9. It can be seen that the said clause will come into effect only from 13/7/2006, while in the case in hand, finalization of bills of entries and filing of refund claim took place before the amendment was incorporated into statute. I find that the ld. Consultant's assertions that the judgment of the Hon'ble Supreme Court in the case of TVS Suzuki Ltd. (supra) will squarely cover the issue in favour of the appellant is correct. I may reproduce the relevant portion of the said judgment.
"5. Shri Verma fairly concedes that the proviso introduced in sub-rule (5) of Rule 9B cannot be said to be retrospective in operation. He, however, contends that on the date on which the proviso was brought into force, i.e. 25-6-1999, the refund claim was still pending with the departmental authorities and, therefore, it had to be adjudicated in accordance with the law as it became enforceable from 25-6-1999. In our view, this contention cannot be accepted. Merely because the departmental authorities took a long time to process the application for refund, the right of the appellant does not get defeated by the subsequent amendment made in sub-rule (5) of Rule 9B. The Commissioner of Central Excise and the CEGAT were, therefore, justified in holding that the claim for refund made by the appellant had to be decided according to the law laid down by this Court in Mafatlal Industries Ltd. (supra) and would not be governed by the proviso to sub-rule (5) of Rule 9B".
10. It has to be mentioned here that the provisions of sub-rule 5 of Rule 9B of the Central Excise Rules were pari-materia to the provisions of Section 18 of the Customs Act, 1962 as regards the provisional assessment and finalization thereof. In view of this, in my considered view, the impugned order is not correct and needs to be set aside and I do so. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Pronounced and dictated in open court) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 7