Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Nhavasheva vs M/S. Ktr Coupling P. Ltd on 13 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/960/07 Mum
(Arising out of Order-in-Appeal No. 219 (CRC)/2007 (JNCH) dated 31.7.2007 passed by the Commissioner of Customs (Appeals), Nhava Sheva)
For approval and signature:
Honble Shri A.K. Srivastava, Member (Technical)
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Commissioner of Customs, Nhavasheva
:
Appellant
Versus
M/s. KTR Coupling P. Ltd.
Respondent
Appearance Shri Dr. Y.D. Banga, SDR for Appellant Shri P. Unnikrishnan, Liasion Officer for Respondents CORAM:
Shri. A.K. Srivastava, Member (Technical) Date of Hearing : 13.02.08 Date of Decision : 13.02.08 ORDER NO.
Per : Shri. A.K. Srivastava, Member (Technical) Heard both sides and perused the records.
2. The facts of the case are that M/s. KTR Couplings (India) Ltd., Pune (the respondents herein) had imported different types of couplings contained in nine packages and had filed the Bill of Entry No. 733252 dt. 2.11.2004 in respect of the same. The duty payable on the same was assessed at Rs.4,19,246/- which was paid by the respondents on 8.11.2004. On examination, it was found that one package was received less and only eight packages were received instead of nine packages. The matter was referred to the shipping company and the supplier and it was confirmed that one package was short shipped. Therefore, the respondents requested for re-assessment of the Bill of Entry and on re-assessment, the duty payable on the goods actually received in the consignment was assessed at Rs.3,08,085/- resulting in excess payment of duty amounting to Rs.1,11,161/-, which the respondents have claimed as refund. On adjudication, the Asst. Commissioner sanctioned the refund of Rs.1,11,161/- but credited it to the Consumer Welfare Fund. On appeal by the respondents, the Commissioner (Appeals) granted the consequential relief. Hence this appeal by the Revenue.
3. I have examined the position. I find that the respondents have submitted the certificate issued by the Chartered Accountant, Profit and Loss Account and the balance sheet for the relevant years i.e. the year ended 31.03.2005 and the year ended 31.03.2006 before the Asst. Commissioner. On perusal of the same, the Asst. Commissioner has observed that the said certificate certifies the fact that the amount of Rs.1,11,161/- claimed as refund is included in the total amount of Rs.2,29,161/- appearing in the balance sheet under the account Customs Claim receivable in Schedule 3 to the balance sheet under the head Current Assets, loans and advances. It is further certified in the said certificate that the said amount of tax has not been recovered from any customer or any other party upto the date of the certificate. Thus it is abundantly clear that the respondents have discharged the onus cast upon them as far as the unjust enrichment is concerned. They have established by way of aforesaid evidences that the incidence of duty has not been passed on by them to any other person.
4. There are plethora of case laws which hold that the bar of unjust enrichment does not apply when the amount is shown as receivable in the balance sheet. Some of the case laws by way illustration in this regard are cited below:-
i) Hero Honda Motors Ltd. vs. CC 2000 (126) ELT 1014 (Tri.)
ii) Commissioner of Customs, Air Cargo Unit, vs. Maruti Udyog Ltd. 2003 (155) ELT 523 (Tri. Del)
iii) Brindavan Tex Processors Pvt. Ltd. vs. CCE, Bangalore 2006 (196) ELT 61 (Tri. Del)
5. The short landing of one package is an admitted fact on record. Therefore, it cannot be denied that the amount pertains to the duty paid for the goods that did not exist at the relevant time. Since there cannot be a buyer for the non-existent goods, it is normal logic that the duty could also not have been passed on to a non-existent buyer. The Tribunal in the case of M/s. Godrej and Boyce Mfg. Co. Ltd. vs. Collector of Customs, Mumbai reported in 2001 (134) ELT 429 (Tri. Mumbai), in an identical situation, has observed as under:-
The claim arose because the goods in respect of which the duty was paid never arrived in India. In that situation, there could be no question of incidence of duty being passed on. The importer could not have sold the goods or used them for any other purpose, there being nothing to sell or use.
6. The respondents have a valid point when they say that the missing goods were the parts without which the finished goods could not be assembled and sold and, therefore, the question of unjust enrichment just does not arise.
7. The reliance placed by the Revenue on the Honble Supreme Court judgement in the case of UOI vs. Solar Pesticides Pvt. Ltd. (2000 (116) ELT 401 (SC) in fact advances the cause of the respondents. While holding that the principles of unjust enrichment equally apply to the goods imported for captive use for the manufacture of other finished goods, the Honble Supreme Court in the above case also observed that even in cases of captive consumption, it should be possible for the importer to show and prove before the authorities concerned that the incidence of duty on the raw material, in respect of which, refund is claimed, has not been passed on by the importer to anybody else. This is precisely what the respondents have done. They have produced the Chartered Accounts certificate, Profit and Loss Account and the balance sheets for the relevant years to establish that the incidence of duty has not been passed on to anybody else. Therefore, the refund claim has been rightly allowed by the Commissioner (Appeals). Another case law i.e. Sahkari Khand Udyog Mandal vs. CCE 2005 (181) ELT 328 (SC) relied upon by the Revenue also does not help them as it lays down the general guidelines in respect of the doctrine of unjust enrichment which in fact, have been followed in this case by the Commissioner (Appeals). The case law in the case of M/s. Godrej and Boyce Mfg. Co. Ltd. cited supra is squarely applicable to the facts of the present case and is required to be followed. The appeal filed by the Revenue lacks substance.
8.0 In the light of the foregoing discussions, I hold that the appeal filed by the Revenue is not maintainable and is accordingly dismissed.
(Pronounced in Court) (A.K. Srivastava) Member (Technical) nsk 5