Custom, Excise & Service Tax Tribunal
M/S. Mahindra & Mahindra Ltd vs Commissioner Of Customs(Import), ... on 26 November, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.1
APPEAL NO.C/1022/07-Mum
(Arising out of Order-in- Appeal No.254(Gr.VI)/2007(JNCH) dtd. 31.8.2007 passed by the Commissioner of Customs (Appeals), Nhava Sheva )
For approval and signature:
Honble Mr S.S.Kang, Vice President
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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?
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M/s. Mahindra & Mahindra Ltd.
:
Appellants
VS
Commissioner of Customs(Import), Nhava Sheva
Respondent
Appearance
Shri M.H.Patil, Advocate for Appellants
Shri D.Nagveukar, Addl. Commissioner(A.R.) for Respondent
CORAM:
Mr. S. S. Kang, Vice President
Date of hearing: 26/11/2013
Date of decision 26/11/2013
ORDER NO.
Per : S.S.Kang
Heard both sides.
2. The appellants filed this appeal against the impugned order passed by the Commissioner (Appeals).
3. The brief facts of the case are that the appellants had registered a contract for import of raw materials, components, consumables etc. under the Project Import Regulations, 1986. At the time of registration of contract, the Revenue authorities directed the appellants to make security deposit of Rs. 17,54,240/-. Subsequently, as per the provisions of the Project Import Regulations, the assessment was finalized and appropriate duty has been paid. Thereafter, the appellants filed application for refund of security deposit. The refund claim was rejected on the ground that the appellants had not produced evidence that burden of duty has not been passed on to others. The appellants challenged the order of rejection of refund of security deposit.
4. The contention of the appellants is that the provisions of unjust enrichment are not applicable in respect of the security deposit. The appellants relied on the provisions of Sec.27 of the Customs Act to submit that the provisions of unjust enrichment are applicable in respect of duty and interest. In this regard the appellants relied upon the following decisions:-
1) IDMC Ltd vs. CC, Mumbai - 2013(289)ELT 389(Tri-Mumm) (2) CC, Chennai vs. Minvera Trade Links(P)Ltd 2009(233)ELT 399(Tri-Chennai) (3) CC, Chennai vs. M/s. Madras Fertilizers Ltd (Appeal No.C/5 and 37/2006 Final Order Nos.115-116/12).
The contention is that the tribunal in the above decisions held that as the cash security has been made in terms of Boards Circular for registration of the contract under the Project Import Regulations, provisions of unjust enrichment are not applicable.
5. Revenue relied on the findings of the lower authority.
6. I find that the refund is in respect of the security deposit which was made as per the Boards circular dated 9.8.1995. The circular provides as under:-
2. The issue regarding furnishing of a cash security equal to 5% of the Cif value of the goods sought to imported under Project Import has further been examined by the Board and in view of the reduction in import duty and ongoing liberalization, it has been decided that in future cash security equivalent to 2% of the CIF value of goods sought to be imported subject to a maximum of Rs. 50- lakhs, would only be taken in place of 5% cash security, presently, being taken. The balance amount shall be covered by a bamk guarantee backed by an undertaking to renew it till the finalization of the contract. The Government Department and Public Sector Undertaking would, however, continue to be exempted from furnishing the above cash security. In respect of Fertilizer Projects which are liable to Zero rate of duty. Commissioners are advised to take only a nominal cash security not exceeding 0.5% of the duty foregone at project import rate subject to a maximum of Rs. 20 lakhs. .
7. The assessment in respect of the goods imported by the appellants under the Project Import was finalized. Further, the amount in question is shown as recoverable as per the certificate of the Chartered Accountant.
8. I find that the issue is now settled by the decision of the tribunal relied upon the appellants in the case of IDMC Ltd supra. The Tribunal held as under:-
5 I have carefully considered the rival submissions. In the case relied upon by Revenue the deposit was made pursuant to an order, dated 31.10.2001 from the Honble Bombay High Court. Ultimately, in that case, inasmuch as the appellant has proved that he has not passed on the incidence of duty, refund was granted. In the said judgment there was no conclusion to say that pre-deposit of amounts would be construed as duty. In fact the Tribunal did not go into the question at all. In the case before, the payment of cash security was made in terms of the Boards circular cited supra and the circular makes it abundantly clear that it is only a cash security and not any other payment. If that be so, provisions of Section 27(2) which applies to duty and interest thereon, does not apply to cash securities made. Therefore, the question of proving unjust enrichment would not arise in the case of refund of cash securities.
9. In view of the above decision which is fully applicable to the facts of the present case, the impugned order is set aside and the appeal is allowed.
(Dictated in court) S. S. Kang Vice President pv 5