Customs, Excise and Gold Tribunal - Delhi
Alcatel Modi Net Works Systems vs Commissioner Of Cus. on 18 February, 1999
Equivalent citations: 2000(117)ELT522(TRI-DEL)
ORDER
P.C. Jain, Vice President
1. It is stated that the facts of the case are as follows :
2. The appellant is a manufacturer of Digital Switching Equipment and Cellular exchange equipment. They imported various components used for manufacturing the above items from their joint venture partner M/s. Alcatel Inc., France. The authorities below felt that the appellant herein and their joint venture partner are having "special relationship". Consequently, the Revenue provisionally ordered for ignoring the invoice price and started loading the invoice price by a certain amount. In the final order passed by the Asst. Collector of Customs, the loading ordered provisionally has been dropped and gross invoice value as shown by the appellants herein was accepted. This order was passed on 28-4-1995.
3. Consequent to this order of adjudication, final assessments were made by the Customs authorities on 4 Bills of Entry dated 16-10-1995, 13-11-1995, 16-12-1995 and 18-12-1995, while making the provisional assessment final, no consequential refund was given inasmuch as the appellants herein were clearing the goods after making the cash deposit on the basis of loading provisionally ordered by the authorities. Since no suo motu refund, as required in terms of Section 18 of the Customs Act was given by the authorities below, the appellants herein filed 2 refund claims on 13-2-1997 and 6-3-1997. The said refund claims have been rejected by the Commissioner, Customs, Delhi in the impugned order as barred by time on the ground that the refund claims have been filed well beyond the period of 6 months stipulated in Section 27 of the Central Excise Act from the date of final assessment of the duties on bills of entry as mentioned above. It has also been observed that the appellants had to establish that the incidence of duty had been borne by them and not passed on to any other person.
4. It is against the aforesaid order that the appellants have filed this appeal.
5. Ld. Consultant Shri R. Swaminathan has submitted that the adjudicating authority's order rejecting the claim as time barred is not correct in law. He submits after the amendment of the Section 27 by an amending Act in September 1991, there is no 'relevant date' at all for filing a refund application from the date of finalisation of provisional assessment as it was earlier prior to the amendment of Section 27. Further, he points out that the Apex Court has ruled in para 95 of its judgment in the case of Mafatlal Industries v. Union of India reported in 1997 (89) E.L.T. 247 that any recovery or refund consequent on the finalisation of provisional assessment under Sub-Rule (5) of Rule 9B of Central Excise Rules [corresponding Section 18(2) of the Customs Act] will not be governed by Section 11A or Section 11B as the case may be [Section 28 or Section 27 of the Central Customs Act, as the case may be]. In order to appreciate this contention of the ld. consultant, we reproduce para 95 of the said judgment :
"Para 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 assesee 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 that such a writ 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."
6. Ld. consultant therefore submits that it is the duty of the Customs Department to automatically give refund to the appellants herein without waiting for any refund application because the refund arises as a consequence of finalisation of the provisional assessment. He therefore submits that filing of the refund claim by the appellants on 13-2-1997 and 6-3-1997 cannot be said to be hit by time bar. He also relies for the abovesaid propositions on Tribunal's judgment in the case of C.C.E. v. Usha Beltron Constructions, 1996 (13) RLT 237 as also on another judgment in Gujarat Fertilisers, 1997 (20) RLT 935 which follows Usha Beltron (supra). He has also pointed out that the Commissioner's observation that the appellants have to establish that the burden has not been passed on to the Customs is also not tenable inasmuch as the imported goods have been used captively in manufacture of another final product. He further submits that it is apparent from endorsement on the bills of entry which states that the "Modvat is availed". This means that the imported goods have been captively utilised for manufacture of another commodity. He therefore prays for allowing the appeal with consequential refund to the appellant.
7. Ld. JDR Shri M.M. Dube submits that the plea taken before the adjudicating authority by the appellants appears to be that the refund claim was within the general law of limitation possibly on the account of the fact that the deposit made for which the refund is now sought could not be termed as duty. It is this plea of the appellant which has been considered and rejected by the Commissioner of Customs inasmuch as the adjudicating authority under the Customs Act is governed by the limitation spelt out in the Customs Act and not beyond it.
8. He further submits that the plea now taken by the ld. Consultant on the basis of Apex Court's ruling in Mafatlal Industries case (supra) was never before the Commissioner. He also draws attention to the fact regarding the observation made by the Commissioner on not passing of burden of duty to the customers. He further submits that it is a question of fact. Ld. JDR therefore submits that it will be in the fitness of things that the matter is remanded to the Commissioner inasmuch as legal and factual pleas now put forward by the ld. Consultant of the appellants was never before the Commissioner.
9. We have carefully considered the pleas and arguments advanced from both sides. We observe from the file and impugned order that no new factual plea is involved and bills of entry clearly show endorsement that Modvat has been availed in respect of imported goods. Ld. Consultant is therefore correct on this point that imported goods have been captively utilised in the manufacture of final product.
10. As regards the plea of limitation, we observe that mere question of law does not call for a remand to the Commissioner of Customs. We observe from para 95 of the Apex Court's judgment as reproduced above that the plea advanced by the ld. Consultant is correct in law. Refund of duty or recovery of duty as a result of the finalisation of provisional assessment has to be given suo motu by the concerned authorities. There is no limitation involved in either making recovery or giving refund as a result of finalisation of assessment.
11. Another plea taken by the ld. JDR that mere utilisation of the imported goods in final product is not enough to determine whether burden of duty has been passed on to the customers or not and what is required to be seen, according to him, is whether the price fixed for final product has taken into account, the burden of duty on the inputs and in particular the imported goods or not. This is a question of fact which is required to be determined, submits ld. JDR. We are unable to accept this plea in view of Bombay High Court judgment in the case of Solar Pesticides v. C.C.E. reported in 1992 (57) E.L.T. 201. This judgment of the Bombay High Court has been consistently followed by the Tribunal holding that the question of unjust enrichment does not arise in respect of goods which are utilised in manufacture of another product and not sold as such. Therefore the plea taken by the ld. JDR is of no avail. In view of the foregoing discussions we set aside the impugned order and direct the Commissioner of Customs to grant consequential refund to the appellant.