Customs, Excise and Gold Tribunal - Mumbai
Godrej Industries Ltd. vs The Commissioner Of Customs on 15 November, 2006
ORDER Archana Wadhwa, Member (J)
1. As per facts on record, a dispute about the correct classification of imported consignment of "Alpha Olefin C-14" arose between the appellants and the Customs authorities. Whereas the appellant was claiming the classification under Chapter 29, revenue classified the same under Customs Tariff Heading 27.10. The dispute travelled up to Tribunal and the appeal filed by the appellants was rejected. The said order of the Tribunal was challenged before the Hon'ble Supreme Court. As per the interim order dated 21/08/2000 passed by the Hon'ble Supreme Court, the appellants deposited an amount of Rs. 3,39,72,898/- on 16/11/2000. The appeal was ultimately disposed of by the Hon'ble Supreme Court remanding the matter to the original adjudicating authority for deciding the issue of classification. As a consequence, the original adjudicating authority passed the order accepting the appellants claim of classification under heading 2901. There is no dispute about the said classification adopted by the original adjudicating authority.
2. As a consequence of settlement of dispute on classification in favour of the appellants, they became entitled to refund of the deposits made by them on 16/1/2000, in terms of the Supreme Court's direction. Accordingly, vide their letter dated 29/01/2003, the appellants requested for refund of the said deposit amount. The matter was taken up by the Assistant Commissioner of Customs for adjudication and vide his order dated 30/03/2004, the said amount was sanctioned for refund. While ordering, the Assistant Commissioner observed as under:
I find that the sum deposited by the party may not be considered as a duty and hence it will not be hit by limitation under Section 27 of the Customs Act, 1962 so also the provisions of unjust enrichment will also not be applicable in the light of the judgment of CEGAT Chennai in the case of Commissioner v. Rane Engine Valves Ltd. 2005 (162) ELT 417 and also in view of judgments passed on similar matter in the case of Nipha Machinery Manufacturers Pvt. Ltd. in the case of Super Casette Industries Ltd., v. Collector of Customs 1993 (66) ELT 552 (Cal.). I therefore hold no reason to with held the said amount of deposit made by the party in compliance with the provisions of Section 129E of the Customs Act, 1962 and in view of the foregoing I therefore order as under. I hereby sanction for refund of an amount of Rs. 3,39,72,898/ (Rupees three crore thirty nine lakh seventy two thousand eight hundred ninety eight only).
3. The above order of the Assistant Commissioner was appealed against by the revenue before the Commissioner (Appeals), who after relying upon the Hon'ble Supreme Court's decision in the case of Sahakari khand Udyog Mandal Ltd., v. CCE held that the provisions of unjust enrichment are applicable. Since the lower authorities has not examined the same, he set aside the order and allowed the appeal of the revenue. Hence, the present appeal.
4. We have heard Shri R. Ravindran, Ld. Advocate appearing for the appellants and Shri P.K. Katiyar, Ld. SDR appearing for the revenue.
5. It is seen that the dispute originally related to the imports made during the year 1994 to 97. The differential duty was paid by the appellants in the year 2000 in terms of the interim order passed by the Hon'ble Supreme Court. On ultimate success of their appeal before the Supreme Court remanding the matter and the Assistant Commissioner accepting the classification in denovo proceedings, the appellants would certainly become entitled to deposits made by them for the purposes of hearing of their appeal and in terms of the Hon'ble Supreme Court's interim order. We find that the Commissioner (Appeals) reliance on the Supreme Court's decision in the case of Sahakari Khand Udyog Mandal Ltd., is not appropriate inasmuch the issue before the Hon'ble Supreme Court was not as regards the refund of pre-deposit made for the purposes of hearing of the appeal. On the other hand, we find that the Hon'ble Supreme Court's in the case of CCE Hyderabad v. ITC Ltd. 2005 (179) ELT 15 (SC). by taking note of the Board's Circular, has ordered payment of interest on refund accruing to the assessee, as a result of success of their appeal. The Tribunal has also considered the said issue in a number of matters and has held that such amounts deposited after adjudication have to be treated as deposits and not duties and would not attract the provisions of unjust enrichment. The Board's Circular No. 275/37/2K-CX.8A dated 2/01/2002 has examined the issue relating to the refund of pre-deposit made during the pendency of the appeal and it was decided that since the practice in department had all along been to consider such deposits as other than the duty, such deposits should be returned in the event the appellants succeeds in appeal or the matter is remanded for fresh adjudication. In para 3 of the said Circular, the Board's observed as under:
In order to attain uniformity and to regulate such refunds it is clarified that refund applications under Section 11B(1) of the Central Excise Act, 1944 or under Section 27(1) of the Customs Act, 1962 need not be insisted upon. A simple letter from the person who has made such deposit, requesting the return of the amount, along with an attested Xerox copy of the order-in-appeal or CEGAT order consequent to which the deposit made becomes returnable and an attested Xerox copy of the challan in Form TR6 evidencing the payment of the amount of such deposit, addressed to the concerned Assistant/Deputy Commissioner of Central Excise or Customs, as the case may be, will suffice for the purpose. All pending refund applications already made under the relevant provisions of the indirect tax enactments for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned.
As is seen from the above Circular of the Board, the deposits made during the pendency of the appeal automatically become refundable to the assessee on success of their appeals, without the assessee having made any refund application. As such, deposits are basically in the nature of a condition of hearing of the pending appeal. In any case, in the present case the Imports were effected during the period 1994 to 97 and the deposits were made by the appellants in the year 2000, during the pendency of the appeal before the Hon'ble Supreme Court. As such, in our view it cannot be reasonably concluded that the same would be hit by the bar unjust enrichment. We accordingly set aside the impugned order of the Commissioner (Appeals) and restore the order of the Assistant Commissioner. The appeal is allowed in above terms.
(Pronounced in Court on 28/11/06)