Custom, Excise & Service Tax Tribunal
Hindustan Construction Co. Ltd vs Commissioner Of Customs (I), Mumbai on 20 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. APPEAL No. C/734/05-Mum (Arising out of Order-in-Appeal No. 158/2005 MCH dated 11.4.2005 passed by Commissioner of Customs (Appeals), Mumbai-I) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) ======================================================
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 :
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?
====================================================== Hindustan Construction Co. Ltd. Appellant Vs. Commissioner of Customs (I), Mumbai Respondent Appearance: Shri Prashant Patankar, Consultant, for appellant Shri D.K. Sinha, Assistant Commissioner (AR), for respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing: 20.9.2016 Date of Decision: 20.9.2016 ORDER NO
This appeal is directed against order-in-appeal No. 158/2005 MCH dated 11.4.2005.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the refund of an amount which has been held in favour of the appellant-assessee by the adjudicating authority.
4. The appellant herein imported cutter head with cutters for tunnel boring machine and filed bill of entry on 2.3.2001 seeking classification of the product under heading 8431.43, whereas the Revenue was of the view that the imported goods are classifiable under 8207.19. The bill of entry was provisionally assessed and a revenue deposit of Rs.40,95,032/- was directed to be paid, which was paid. The matter of provisional assessment was taken up for final assessment and the adjudicating authority held that the imported goods are classifiable under 8431.43. On receipt of such an order in their favour, the appellant sought refund of the amount deposited by them as a revenue deposit. The adjudicating authority, after following due process of law, held that the deposits made by the appellant were revenue deposits and a Chartered Accountant has issued a certificate stating clearly that the amounts are not expensed out and are shown in the balance sheet as receivable, held in favour of the assessee and directed for the refund of the said amount. Aggrieved by the said decision, Revenue filed an appeal before the first appellate authority. The first appellate authority, after considering the submissions made before him relying upon the judgment of the Honble High Court of Bombay in the case of Bussa Overseas and Properties Pvt. Ltd. vs. UOI 2003 (158) ELT 135 (Bom.), held that the refund arising under Section 18(2) is also subject to passing the hurdle of unjust enrichment. Coming to such a conclusion, he overturned the decision of the adjudicating authority and held against the appellant-importer.
5. Learned counsel would submit that the first appellate authority was very much in error in setting aside the impugned order as it is undisputed that the bills of entry were assessed provisionally under Section 18 in 2001. It is his submission that the bills of entry were finally assessed by the authorities in 2004 and held that the appellant has paid excess duty as revenue deposit. It is his submission that Section 27 which is relied upon by the first appellate authority, is incorrect as during the relevant period, Section 18 did not have the clause of unjust enrichment. He would submit that the provisions of Section 18(3)(4) were introduced w.e.f. 13.7.2006. He would submit that the question of bar of unjust enrichment in the case of provisional assessment being finalized prior to 13.7.2006, will not be attracted is the law settled by the Honble High Court of Karnataka in the case of Mangalore Refinery & Petrochemicals Ltd. vs. CC, Mangalore 2015 (323) ELT 484 (Kar.); by the Honble High Court of Madras in the case of CC(E), Chennai vs. Sayonara Exports Pvt. Ltd. 2015 (321) ELT 583 (Mad.); CC vs. Indian Oil Corporation 2012 (282) ELT 368 (Del.), and by the Honble High Court of Gujarat in the case of CC vs. Hindalco Industries Ltd. 2008 (231) ELT 36 (Guj.). It is his submission that once the law is settled that prior to 13.7.2006 in the case of provisional assessment, question of unjust enrichment does not arise, the first appellate authority was not correct in relying upon the judgment of Bussa Overseas & Properties Pvt. Ltd. (supra) as this specific point of amendment to Section 18 was not discussed and was not before the Honble High Court of Bombay. It is also his submission that the appellant had produced positive evidence in the form of certificate from the Chartered Accountant, wherein it has been clearly mentioned that the appellant had capitalized the amount of customs duty paid as a revenue deposit and was not recovered from the Municipal Corporation of Greater Mumbai or any other customer. He would submit that the appellant had passed the hurdle of unjust enrichment.
6. Learned departmental representative, on the other hand, submits that any refund that arises is governed by the doctrine of unjust enrichment is the law which has been settled by the apex court in the case of Sahakari Khand Udyog Mandal Ltd. vs. CCE 2005-TIOL-48-SC-CX-LB. It is his submission that once it is the law which has been settled, doctrine of unjust enrichment needs to be specified in favour of an assessee or importer before the refund is sanctioned. He would rely upon the Revenues submission in the case of Bussa Overseas and Properties Pvt. Ltd. in paragraphs 26, 29, 30 and 33.
7. On perusal of the records, I find that the entire issue is regarding the refund of the amount paid by the appellant as a revenue deposit to the Government of India, on being provisionally assessed as regards the import of machinery. It is undisputed that the finalization of the provisional assessment was done in 2004 and it was held that the appellant had paid excess customs duty which is not due from them.
8. Provisional assessments are governed by the provisions of Section 18 of the Customs Act, 1962 and during the relevant period, the section specifically mandated for recovery of short paid and refund of excess paid on finalization of the provisionally assessed bill of entry. The said section did not have a clause of unjust enrichment has to be satisfied before the refund is sanctioned. On 13.7.2006, an amendment was carried out, by which it mandated in Section 18(3) & (4) that any refund that arises due to finalization of provisional assessment has to also satisfy the doctrine of unjust enrichment. In my considered view, this amendment was not at all necessary if it is the case of the Revenue that doctrine of unjust enrichment applies in each and every case. I find strong force in the contentions raised by the learned counsel that the Honble High Courts of Karnataka, Madras and Delhi in the recent judgments of Mangalore Refinery & Petrochemicals Ltd., Sayonara Exports Pvt. Ltd. and Indian Oil Corporation respectively have held that bar of unjust enrichment in the case of refund arising out of finalization of provisional assessment will apply only from 13.7.2006.
9. On merits also, I find that the contentions raised by the learned counsel that in July 2005 itself, they had filed the certificate issued by a Chartered Accountant who, after verifying the books of accounts and records and other relevant records of the appellant, had certified that the amount for which refund has been claimed is not charged to profit and loss account as an expense, the said amount is shown as a revenue deposit and was not recovered from the Municipal Corporation of Greater Mumbai or any other customer. This certificate is not controverted by the Revenue in the proceedings before the first appellate authority or before us.
10. In view of the foregoing, on the face of the authoritative judicial pronouncements on the issue in hand and in the facts and circumstances of this case, I find that the impugned order is unsustainable and liable to be set aside and I do so.
11. The impugned order is set aside and the appeal is allowed with consequential relief.
(Pronounced in Court) (M.V. Ravindran) Member (Judicial) tvu 1 7 C/734/05