Customs, Excise and Gold Tribunal - Delhi
G.K.N. Invel Transmissions Ltd. vs Commissioner Of Customs on 30 August, 2000
Equivalent citations: 2000(71)ECC861, 2001(137)ELT527(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. This appeal is against Order-in-Appeal No. MP (38)/ICD/99 dated 27.1.2000 passed by Commissioner of Customs (Appeals), New Delhi. By that order, the appellate authority confirmed assessment Order No. 37/KS/ICD/TKD/98 dated 18.7.98 under which the claim of refund made by the assessee to the tune of Rs. 1,01,06,333 was rejected. The short facts necessary for the disposal of this appeal are follows:
Appellant company was the manufacturer and supplier of 'Front Wheel Drive Axle Assembly' for maruti cars. For this purpose, they entered into collaboration with G.K.N. Automotive AG, Germany. A number of components manufactured by the collaborators were imported. While making the assessments on the bills of entry, the value shown in the invoice was loaded by 5%. In other words, goods covered by 156 bills of entry spread over a period from 1989 to 1994 were provisionally assessed by loading the invoice by 5%. Special Valuation Branch, by its Order No. 15/94 dated 28.9.94, ordered to accept the value given in the invoice for making the assessment. Consequently, assessments on 156 bills of entry were finalised without loading the value shown therein. As a result, a sum of Rs. 1,01,06,333 was found returnable to the assessee. For getting the amount refunded, they filed an application on 2.12.97. On 5.5.98, a show cause notice was issued proposing to reject the refund claim on the ground of unjust enrichment. The proposal made in the show cause notice was confirmed by the adjudicating authority by his Order-in-Original dated 16.7.98. Appeal filed by the assessee against the said order happened to be dismissed. Hence, this appeal.
2. The fact that 156 bills of entry were provisionally assessed by loading the value by 5% is not in dispute. Special Valuation Branch, which went into the issue regarding the value of the goods by its Order No. 15/94 dated 28.9.94 directed the Department to accept the invoice value. Pursuant to that direction given by the Special Valuation Branch, provisional assessments were finalised. Consequently, duty paid by the assessee at the time of provisional assessment was found to be much more than the actual duty payable.
3. Section 18 of the Customs Act deals with provisional assessment of duty. Clause 2(a) of that section applies to the facts on hand. That provision reads:
(2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then--
(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of [the duty finally assessed], the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;
From this provision, it is clear that the authority, while finalising the assessment, should have ordered refund of the excess amount paid by the assessee. Since such a procedure was not resorted to by the adjudicating authority while finalising the assessment, applications were made for return of the excess amount. That application was only a reminder to the assessing authority of the provisions contained in Section 18(2)(a).
4. Claim of refund in cases where provisional assessments are made final was dealt with by their Lordships of the Supreme Court in the case of Mafatlal Industries Ltd. v. Union of India . Law on this point has been stated by their Lordships in paragraph 95 of the judgment which reads as follows:
95. Rule 9B provides for provisional assessment in situations specified in Clauses (a), (b), and (c) of Sub-rule (1). The goods provisionally assessed under Sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that "when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be". Any recoveries or refunds consequent upon the adjustment under Sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under Sub-rule (5) are appealed against--or questioned in a writ petition or suit, as the case may be, assuming writ petition or suit is entertained and is allowed/decreed--then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) re-agitating the issues already decided under Rule 9B--assuming that such a refund claim lies--and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation.
Following the above law, this Tribunal in the cases of Indo Flogates Ltd. v. CCE, Bhubaneswar 1997 (20) RLT 308 (T), Needle Indus. (India) Ltd. v. CCE 1998 (26) RLT 307 (T), Alcatel Modi Network System v. CCE , CCE v. T.V. Suzuki Ltd. 1999 (34) RLT 668, and final Order No. A/440/2000-NB(DB) dated 25.4.2000 took the view that the principles relating to unjust enrichment will not apply to cases where provisional assessment is finalised.
5. Learned Counsel representing the appellant advanced another argument in the following manner. While provisionally assessing the bills of entry the value was loaded by 5% on the direction of Special Valuation Branch. The amount paid on such loading was only a deposit made by the importer and not duty paid on assessment. Loading of 5% was given a go by after investigation by the Special Valuation Branch by their Order No. 15/94 dated 28.9.94. Thereupon, according to learned counsel, the deposit which was made as per the direction of the Special Valuation Branch should have been returned. In returning that deposit, the argument was that the principles of unjust enrichment can, under no circumstance, apply. For giving relief to the appellant before us, we need not elaborate on this argument because according to this Tribunal, the matter is covered by the decision of their Lordships in the Mafatlal Industries Ltd. case referred to earlier.
6. In view of what has been stated above, we allow this appeal, set aside the orders of the authorities below and direct refund of Rs. 1,01,06,333.