Custom, Excise & Service Tax Tribunal
M/S. Vxl Instruments Ltd vs The Commissioner Of Customs on 25 November, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - Single Member Bench
Court - II
Date of Hearing: 25.11.2011
Date of decision: 25.11.2011
Appeal No. C/2581/2010
(Arising out of Order-in-Appeal No. 168/2010 dated 30.08.2010 passed by the Commissioner of Customs, Bangalore)
For approval and signature:
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3. Whether their Lordship wish to see the fair copy of the Order?
Seen
4. Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. VXL Instruments Ltd. ..Appellant(s)
Vs.
The Commissioner of Customs
Bangalore Respondent(s)
Appearance Mr. M.S. Nagaraja, Advocate for the appellant Mr. M. Ravi Rajendran, JDR, for the Revenue Coram:
Honble Mr. M. Veeraiyan, Member (Technical) FINAL ORDER No._______________________2011 This is an appeal against the order of the Commissioner (Appeals) No. 168/2010 dated 30.08.2010 by which order of the original authority crediting the refund of Rs. 7,14,998/- to the Consumer Welfare Fund stands upheld.
2. Heard both sides.
3. The relevant facts, in brief, are that the appellants are 100% EHTP unit engaged in the manufacture and export of computers, their parts and accessories falling under Chapter Heading 8471, 8473 and 8429 of the First Schedule to the Central Excise Tariff Act, 1985. Notification No. 6/2006-CE dated 01.03.2006 reduced the duty on goods falling under Chapter Heading 8471 from 16 to 12%. The assessee was permitted to sell certain quantity of final products in DTA based on their export performance. The Jurisdictional Customs/Excise authorities vide communication dated 14.12.2007 directed the assessee that the concession provided under Notification 6/2006-CE dated 01.03.2006 was not applicable to them and that they have to pay duty at the rate of 16%. This instruction was subsequently reversed vide the communication dated 14.06.2008 holding that they were eligible for concessional rate of duty on DTA sales. Meanwhile, the assessee paid duty under protest on the higher rate @ 16.48% as against 12.36% as claimed by them. The appellant claimed refund which stands accepted on merits but credited to Consumer Welfare Fund on the ground of unjust enrichment. Commissioner (Appeals) has upheld the order of the original authority rejecting the cash refund.
4.1. Learned advocate for the appellant, after narrating the above factual backgrounds, submits that their agreement with the DTA purchasers were for cum duty price and the same indicated excise duty only at the rate of 12.36%. It is at the specific instructions of the Jurisdictional Customs authorities that they were forced to pay duty at 16.48% which they paid under protest. To fulfill the terms of contract, they continued to collect only the same price from the buyers as per contract. After the latter clarification dated 14.06.2008 also, they have maintained the same prices.
4.2. He submits that they have not passed on the excess duty burden to the customers and therefore, there is no bar of unjust enrichment applicable to the present case. In this regard he relies on several decisions, particularly, the decision of the Honble Supreme Court in the case of Commissioner of Customs, New Delhi Vs. Organan (India) Ltd. reported in 2008 (231) E.L.T. 201 (S.C), decision of the Tribunal in the case of Amadalavalasa Cooperative Sugars Ltd. Vs. Commissioner of Central Excise, Visakhapatnam reported in 2009 (15) S.T.R. 501 and the judgments of the Honble Supreme Court in the case of Commissioner of Central Excise, Calcutta Vs. Panihati Rubber Ltd. reported in 2006 (202) E.L.T. 41 (S.C).
5. Opposing the appeal, the learned DR submits that the appellants have clearly mentioned higher rate and duty amount in the invoices and therefore, it is presumed that they have passed on the duty burden to the customers. In this regard, he relies on the decision of the Tribunal in the case of CEAT Ltd. Vs. CCE, Aurangabad reported in 2004 (170) E.L.T. 442 (Tri.-Mumbai).
6.1. I have carefully considered the submissions from both sides and perused the records. It is true that the authorities below have found that the appellants have indicated higher rate of duty and the amount of duty during the relevant period in the invoices raised by them on their customers. However, the facts of the present case have to be appreciated in the proper perspective. It is not being disputed that the appellants had contract with the DTA buyers for cum duty price indicating the rate of duty as 12.36%. Only the department insisted by a letter dated 14.12.2007 that they were not eligible for the benefit of Notification 6/2006-CE dated 01.03.2006 while determining the CVD component of the duty payable. This instruction was withdrawn by their subsequent letter dated 14.06.2008. Under these circumstances, the appellants have been forced to pay duty on the higher rate. This higher rate of duty stands paid under protest by the appellants. It is also not in dispute that the price before 14.06.2008 and after 14.06.2008 to the customers in DTA sale remained the same based on the contracts with the buyers.
6.2. Keeping the above factual scenario in mind, it would be appropriate to discuss the decisions relied upon by both sides in support of their respective contentions.
a) Honble Supreme Court in the case of Commissioner of Customs, New Delhi Vs. Organan (India) Ltd. (cited supra) taking note of the fact that there was no change in price post-levying of the duty and there was auditors certificate certifying that the burden of customs duty was not passed on to the customers upheld the finding that there was no passing of duty burden in the said case. Honble Supreme Court in the case of Commissioner of Central Excise, Calcutta Vs. Panihati Rubber Ltd. (cited supra), appreciating the fact that the contract for sale indicated element of excise duty as nil and payment of duty was under protest as insisted by the department, approved the finding that the burden of the excise duty was not passed on and that they were entitled cash refund.
b) The Tribunal in the case of Amadalavalasa Cooperative Sugars Ltd. Vs. Commissioner of Central Excise, Visakhapatnam, taking note of the nature of contract which was inclusive of duty payable held that when the higher duty was paid the price stood reduced and there was no passing on the burden of duty.
c) The decision in the case of CEAT Ltd. Vs. CCE, Aurangabad relied upon by the department was on the ground that there was no material on record produced by the assessee to establish that they have not passed on the duty burden to their customers. The refund claim has been rightly rejected.
6.3. Going back to the facts of the present case, it is noticed that the appellants have maintained the same contract price before and after 14.06.2008 and their payment of higher duty was under protest and was at the insistence of the department. Therefore, I hold that ratios of the decisions relied on by the learned advocate are applicable to the facts of the present case. In view of the above, I set aside the finding of the Commissioner (Appeals) that the refund was barred by unjust enrichment and direct the refund claim be allowed to the party.
7. Appeal is allowed with consequential relief as per law.
(Pronounced & dictated in open Court)
(M. VEERAIYAN) MEMBER (TECHNICAL)
iss