Custom, Excise & Service Tax Tribunal
M/S Ongc Ltd vs Commissioner Of Customs, Mumbai on 1 April, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. C/1138 & 1139/09 (Arising out of Order-in-Appeal No. 225 & 226/2009/MCH/AC/Gr.VA/ 2009 dated 24.08.2009 passed by the Commissioner of Customs (Appeals), Mumbai-I). For approval and signature: Honble Shri 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 : Yes 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? ====================================================== M/s ONGC Ltd. Appellants Vs. Commissioner of Customs, Mumbai Respondent Appearance: Shri Manoj K Sanklecha Advocate for Appellant Shri V.K. Singh SDR for Respondent CORAM: SHRI SAHAB SINGH, MEMBER (TECHNICAL) Date of Hearing: 01.04.2011 Date of Decision: .04.2011 ORDER NO. WZB/MUM/2011 Per: Sahab Singh
These are two appeals No. C/1138/09 & C/1139/09 filed by M/s ONGC against a common Order-in-Appeal No. 225 & 226/2009/MCH/ AC/Gr.VA/2009 dated 24.08.2009 against rejection of the refund claim involving an amount of Rs.7,16,023/- and an amount of Rs.15,847/- respectively.
2. In case of Appeal No. C/1139/09 amount involved is Rs.15,847/-, which is below Rs.50,000/-. Since the appeal is against a common Order-in-Appeal, this is admitted and taken up with the other Appeal No. C/1138/09.
3. The facts of the case are that the appellant filed a refund claim of Rs.7,16,023/- in first case and Rs.15,847/- in the second case for excess duty paid by them. In both the cases, refund of excess duty paid was claimed on the basis of availed trade discount of 5% on the invoice value. The duty was paid on the value assessed without considering the 5% discount. The Assistant Commissioner of Customs in his Orders-in-Original admitted the two refund claim on merit. However, he rejected the refund claim on the ground of unjust enrichment and credited the amounts to the Consumer Welfare Fund (CWF).
4. The learned Counsel appearing on behalf of the ONGC submitted that bar of unjust enrichment will not be applicable to the appellant as they are Public Sector Unit (PSU) of the Government of India. In support of his contention, he is relied upon the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore-II Vs. Karnataka State Agro Corn Products Ltd. 2006 (202) ELT 47 (Kar). In this case, the Karnataka State Agro Corn Products Ltd. is fully owned by the State Government. They are manufacturer of the food products, which are supplied to various department of the Government of Karnataka. At the time of clearance of the goods, Central Excise duty was paid by them to the Central Government. The Karnataka High Court in this case has held that doctrine of unjust enrichment is inapplicable to the state undertakings unless the department is able to show that the Government undertakings are totally different from all angles to the state. He further relied upon the judgment of the Tribunal passed in the case of Commissioner of Customs, Visakhapatnam Vs. Power Grid Corporation of India Ltd. 2008 (223) ELT 661 (Tri-Bang.), wherein the Tribunal relying upon the Hon'ble Karnataka High Courts judgment in the case of Karnataka State Agro (supra) has held that bar of unjust enrichment is not applicable to the PSU.
5. On applicability of the bar of unjust enrichment to PSU, the Counsel submitted that in the case of Cement Corporation of India Vs. Commissioner of Central Excise, Rohtak 2007 (219) ELT 329 (Tri-Del), in para 6 of the order, it was held that judgment of the Hon'ble Karnataka High Court is in context of State Government unit producing items and supplying them to State Govt. authorities for free distribution and is not applicable to the commercial enterprises selling products to the buyers for money. This order was also confirmed by the Hon'ble Supreme Court in which a petition for Special Leave to Appeal No. 17359 of 2007 filed by the Cement Corporation of India against the CESTATs order was dismissed. On the dismissal of application by the Hon'ble Supreme Court, learned Counsel further relied upon the judgment passed by the Supreme Court in Kunhayammed Vs. State of Kerala 2001 (129) ELT 11 (SC) and submitted that dismissal of the petition can be on the various grounds and in every case doctrine of merger will not apply.
6. Next ground taken by the Counsel is that in their case, price is affixed by the Government and they have no control on the price and the bar of unjust enrichment should not apply to the cases where the price is fixed by the Govt. He relies on the various judgments passed by the Honble Supreme Court as well as the Tribunal in the case of State of Rajasthan & Ors. Vs. Hindustan Copper Ltd. 1999 (81) ECR 175 (SC), SAIL Vs. Commissioner of Customs (Port), Kolkata 2008 (230) ELT 647 (Tri-Kol) and SPIC Ltd. Vs. Commissioner of Customs (Import), Chennai 2009 (237) ELT 94 (Tri-Chennai). Relying on these decisions, he stated that ONGC has no control over the price and in view of these decisions, the bar of unjust enrichment is not applicable to the refund claim filed by them.
7. He also submitted that at the time of filing the refund claim, if the claimant has passed on the burden of duty then only the bar of unjust enrichment will be applicable. At the time of filing the refund claim, they have not passed on the burden to any other person, therefore, their claim is not hit by the unjust enrichment clause. He further submits that these claims pertain prior to 1995 and ONGC, at that time, was totally controlled by the Govt. of India and as such, the bar of unjust enrichment should not be applied.
8. The learned Counsel also submitted a Chartered Accountants certificate dated 31.3.2001 in support of their contention that amount involved in the refund claim was not passed on to the customers.
9. Learned SDR, appearing on behalf of the Revenue, submits that in their own case of ONGC reported in 2003 (156) ELT 794 (Tri-Del), it has been held by the Tribunal that bar of unjust enrichment is applicable for refund of duty on capital goods or any captive consumption. Against this Tribunals decision, the ONGC has gone to the Hon'ble Supreme Court and their Civil Appeal was dismissed vide Supreme Courts decision reported in 2004 (163) ELT A207 (SC). A Review Petition was filed by the ONGC in Civil Appeal No. 9550 of 2003 which was also dismissed by the Hon'ble Supreme Court as reported in 2005 (167) ELT A65 (SC). Thereafter, ONGC again filed a Curative Petition No. 70 of 2004 in Review Petition which was also dismissed by the Hon'ble Supreme Court as reported in 2005 (184) ELT A166 (SC).
10. Learned SDR further submitted that all the refund claims on which the appeal has been filed pertain to the capital goods. In their Appeal memo, they have categorically stated that they are seeking refund of the duty paid on the capital goods and the case of refund of any duty on capital goods is squarely covered by the Hon'ble Supreme Courts decision in their own case. Therefore, appellants contention that the bar of unjust enrichment is not applicable to the PSU is not correct in view of the Hon'ble Supreme Courts decision in their own case.
11. As regards the appellants argument that their price was fixed by the Govt. of India and they have no control in change of the price, learned SDR relied upon the judgment of the CESTAT in the case of Philips Electronics India Ltd. Vs. Commissioner of Central Excise, Pune-I 2010 (257) ELT 257 (Tri-Mum), wherein in para 12 of the order, it has been held that the uniformity of price should not be any ground for non-applicability of unjust enrichment to their case. On the certificate of Chartered Accountant produced by the Counsel for the appellant during the course of hearing, learned SDR submitted that they did not file these arguments before the Assistant Commissioner or before the Commissioner (Appeals). It is too late to produce the document at the appellate stage. Therefore, he contended that the order passed by the Commissioner (Appeals) is correct and does not require any interference.
11. After hearing the both sides and on going through the case records, I find that the goods involved in these cases are capital goods as contended by the appellant in their appeals. Both the refund claims have been rejected by the lower authorities on the ground of unjust enrichment. The Hon'ble Supreme Court has upheld the Tribunals decision in their own case in which it was held that unjust enrichment is applicable to ONGC in respect of the capital goods. Their Review Petition and Curative Petition both were dismissed by the Hon'ble Supreme Court and this view has become final. As there is no doubt about nature of the goods being capital goods, in view of the decisions cited above, bar of unjust enrichment is squarely applicable to the present refund claims involved in the appeals. Therefore, I hold that bar of unjust enrichment is applicable to them in view of the Hon'ble Supreme Courts decision in their own case.
12. Accordingly, the appeals are dismissed. .
(Pronounced in Court on ) (Sahab Singh) Member (Technical) Vks/ 1