Custom, Excise & Service Tax Tribunal
Nokia India Sales Pvt Ltd vs Hyderabad - Customs on 24 July, 2018
Appeal No. C/30153-30154/2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench - SMB
Court - I
Appeal No. C/30153-30154/2018
(Arising out of Order-in-Appeal No. HYD-CUS-000-APP-099 & 100-
17-18 dated 06.11.2017 passed by Commissioner of Customs &
Central Excise (Appeals- I), Hyderabad)
M/s Nokia India Sales Pvt. Ltd., .....Appellant(s)
Vs.
Commissioner of Customs,
Hyderabad - Customs .....Respondent(s)
Appearance
Shri Tarun Gulati & Vinayak Mathur, Advocates for the Appellant.
Shri Arun Kumar, Deputy Commissioner (AR) for the Respondent.
Coram:
Hon'ble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL)
Date of Hearing: 02/05/2018
Date of Decision: 24/07/2018
FINAL ORDER No. A/30757-30758/2018
[Order per: M.V. Ravindran]
These two appeals are directed against Order-in-Appeal
No. HYD-CUS-000-APP-099 & 100-17-18 dated 06.11.2017.
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2. The appellants had imported mobile phones falling under
sub-heading No. 85171290 of the Customs Tariff Act, 1975 under
cover of 30 bills of entry filed during the period October, 2014 to
January, 2015. They paid duty on the goods @ 6% CVD and 1%
NCD. Subsequently, the appellant-importer claimed refund of duty
amounting to Rs. 27,78,339/- and Rs. 31,29,645/- in view of the ratio
of the decision rendered by the Hon'ble Supreme Court in the case of
SRF Ltd., Vs. Commissioner of Customs (Civil Appeal No. 9440 of
2003) on the ground that they were eligible for concessional rate of
duty of CVD @ 1% advalorem by virtue of Sl. No. 263A of Notification
No. 12/2012-CE dated 17.03.2012. However, the original authority
rejected the claim of refund filed on the ground that exemption
envisaged under Sl. No. 263A of Notification No. 12/2012-CE dated
17.03.2012 as amended was conditional notification upon the
importer satisfying certain conditions and on demonstration of such
compliance before the assessment of goods. The appellant
appeared not to have complied with the same. Therefore, the
assessment of the bills of entry made originally should be treated as
final assessment of the goods and the benefit of the notification could
not be made available at a belated stage for claiming refund of such
duty paid without having challenged the order of the assessment. It
was also held that the judgement made by Hon'ble Supreme Court in
the case of SRF Ltd., referred above was about availability of
concessional rate of duty on goods and was not about admissibility of
claim for refund of duty made without the assessment made in the bill
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of entry having been challenged. The original authority further held
with reference to the test of unjust enrichment in terms of Section 27
of the Customs Act, 1962 that the appellants failed to disprove the
presumption provided under Section 28 of the Act 1962 that the
burden of duties paid had been passed on to buyers of such goods.
The original authority thus did not accept the Chartered Accountant's
Certificate which in his view had merely stated that the importer had
not passed the burden of the duty paid to the buyers and that there
were no evidences provided by them to prove that they had not
passed on the incidence of duty to the buyers. The original authority
also held that the refund claim in respect of 4 bill of entry mentioned
at paragraph 10.13 of Order-in-Original No. 68/2017-ACC (R) were
also hit by limitation of time under Section 27 of the Customs Act
1962.
3. Aggrieved by such an order, appeals were preferred
before the First Appellate Authority. The First Appellate Authority
after following due process of law, agreed with the contentions of the
appellant in respect of the issue of assessment and following the
judgment of Hon'ble High Court of Delhi in the case of Micromax
Informatics Ltd., [2016 (335) ELT 446] held that there is no necessity
of seeking re-assessment of the duty liability and held that excess
duty paid by the appellant at the time of assessment has to be
considered within the limitation; at the same time rejected the appeals
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of the appellant on the ground of unjust enrichment holding that the
appellant had not made a case on unjust enrichment.
4. Learned Counsel appearing for the appellants submits
that the issue of unjust enrichment was not raised in the show cause
notice and the show cause notice only talks about assessment of the
bill of entry not being challenged, the question of refund does not
arise and appellant was directed to reply to the said allegation only. It
is his further submission that the incidence of duty was not passed on
is evidenced by the appellant by a certificate issued by the Chartered
Accountant who audited their records and certified that the amount of
the refund claimed by the appellant has not been passed to their
customers. He relied upon the decision of the Hon'ble High Court of
Delhi in the case of Yu Televentures Pvt. Ltd., Vs. Union of India &
Ors [2016 (340) ELT 88] on an identical set of facts and submits that
the said judgment of the Hon'ble High Court has been affirmed by the
Apex Court by dismissed the appeal vide an order dated 06.02.2017
and 20.02.2017. He would submit that the said judgment of Yu
Televentures Pvt. Ltd., has been followed by the Hon'ble High Court
of Delhi in the following decisions.
i) Vishal Video and Appliances Ltd., Vs. UOI in writ
petition No. 7851/2016 order allowed on 05.09.2016.
ii) Intex Technologies (India) Limited writ petition No.
10618/2016 allowed by a judgment dated 08.11.2016 and
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upheld by the Apex Court by an order dated 07.07.2017 by
dismissing SLP filed by the petitioner.
iii) Yu Televentures Pvt. Ltd., writ petition No.
2102/2017 allowed in favour of the petitioner by order
dated 26.07.2017
iv) Supertron Electronics Pvt. Ltd., writ petition 45551-
45554/2016 allowed vide an order dated 16.10.2017 by
Hon'ble High Court of Karnataka and Micromax Informatics
Vs. CC (Cargo), Chennai writ petition No. 3486/2016
allowed by judgment dated 18.04.2017 by Hon'ble High
Court of Madras.
5. It is his further submission that the above series of
judgment by the Hon'ble High Court of Delhi, Karnataka and Madras
are on identical set of facts. It is his submission that since the
impugned order in Order-in-Original has gone beyond the show
cause notice, judgment of the Apex Court in the case of CCE,
Mumbai Vs. Toyo Engineering [2006 (7) SCC 592], Precision Rubber
Industries (P) Ltd., [2016 (334) ELT 577] will cover the case in their
favour.
6. Learned Departmental Representative on the other hand
submits that the judgment of the Micromax Informatics has been
challenged in SLP before the Apex Court and Apex Court has
admitted the same and issued notices. It is his submission that the
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same is reported at [2017 (349) ELT A101]. It is his further
submission that the appellant has not been able to pass the hurdle of
unjust enrichment in this case and only because the price of the
imported goods remained same, does not mean that incidence of
duty has not been passed on. It is his further submission that since
special leave petition in Micromax Informatics is admitted the
correctness of the judgment remains wide upon and in such a case,
the reliance placed by the First Appellate Authority in the case of
Micromax Informatics is incorrect. Further it is his submission that
Hon'ble High Court of Madras has in the case of Shoppers Stop Ltd.,
[2018 (8) G.S.T.L. 47] has held that primary evidence of sales
invoices needs to be considered for coming to a conclusion as to
whether assessee has passed the hurdle of unjust enrichment and
not recovered the incidence of the duty from their customers.
7. I have considered the submissions made by both sides
and perused the records.
8. The only question that remains in both the appeals is
whether the appellant is able to prove the hurdle of unjust enrichment
has been passed on or not. The facts of the case is reproduced
herein above are not in dispute.
9. On perusal of the Chartered Accountant Certificate which
is produced before the Lower Authorities and also produced before
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the Tribunal, I find that the Chartered Accountant (Auditors) certificate
clearly recorded that for the purpose of examining the case of unjust
enrichment, they audited importer's books of accounts and other
documents and record of the goods, based upon such verification,
certified that incidence of duty is not passed on. The said Chartered
Accountant is along with annexures showing as to how calculations
are arrived at. As against such clear evidence from the Chartered
Accountant, we find that Revenue has not adduced contrary evidence
to show that appellant herein had passed on the incidence of duty. In
the absence of any contrary evidence, we have to hold that the
Chartered Accountant's Certificate as produced by appellant needs to
be accepted.
10. Secondly, we do find that the decision of the Hon'ble High
Court of Delhi in the case of Yu Televentures Pvt. Ltd., is specifically
on this point and with great respect, I reproduce the relevant
paragraphs:
"11. By the impugned order dated 7th July, 2016, Respondent No. 4
rejected the petitioner's refund application. As far as the decision of the
Supreme Court in SRF Ltd. (supra) was concerned, Respondent No. 4 chose
to highlight in bold letters in the impugned order the fact that the
Department had filed a review petition in the Supreme Court which had
been admitted and was pending consideration. As far as the decision of this
Court in Micromax Informatics (supra) was concerned, Respondent No. 4
again highlighted in bold letters in the impugned order that "the above
order of the Hon'ble High Court has not been accepted by the Department
and the Department has now decided to file a SLP before the Apex Court
against the orders of the Hon'ble High Court." Respondent No. 4, therefore,
chose to completely ignore the decision of the Supreme Court and of this
Court which were binding on him. Respondent No. 4 concluded as under :
"In view of the above, I find that refund claim of Rs. 2,10,96,725/-
filed on 29-12-2015 is not maintainable since the importer has failed
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to fulfil the basic condition for claiming of excess payment of customs
duty under section 27(1)(a) of the Customs Act, 1962. I find there is
no proof of excess payment of custom duty in respect of Bill of entries
filed by the party from the period 2-1-2015 to 10-2-2015 as these are
finally assessed Bills of Entry and the party has also failed to submit
the reassessed Bills of Entry as per benefit claimed by them. Thus the
claim is not admissible and liable to be rejected."
.....................
16. With the petitioner having already placed all the relevant documents on record and with the only reason for rejection of the refund application being the untenable ground of alleged failure by the petitioner to submit re-assessed B/Es, the Court sees no reason why the respondents should be permitted to deny the petitioner the grant of refund any longer.
17. Accordingly, the refund claim filed by the petitioner on 28th December, 2015 is allowed. The respondents will now pay to the petitioner the amount of refund as claimed together with interest due thereon up to the date of refund not later than two weeks from today."
11. I find that Hon'ble High Court of Delhi again had an occasion to consider identical issue as in these appeals in the case of Vishal Video and Appliances Ltd., in writ petition No. 7851/2016. The said writ petition was allowed in favour of the petitioner therein by order dated 05.09.2016 (unreported) their Lordships had an occasion to consider the ground of unjust enrichment. It was held as under:
"4. This Court notices from the record that the concerned adjudication officer, who rejected the petitioner's claim for refund has adopted the same approach that she did which became the subject matter of scrutiny in several previous orders commencing from Micromax (supra). We notice that the Micromax (supra) was revisited in Yu Televentures v. Union of India [W.P. (C) No. 6750/2016, decided on 3-8-2016]. In the present case as well, the order rejecting the refund was made during the same period and apparently by the same officer who rejected the refund claim in Yu Televentures (supra).
5. It is contended lastly by the respondents that this Court should not grant relief in this case since there is no ascertainment as to whether the CVD was in fact passed on and collected from the end user. The petitioner, on the other hand, submits that all relevant documents, including the Chartered Accountant's certificate as required by the rules were furnished. The relevant part of the CA's certificate reads as follows:8
Appeal No. C/30153-30154/2018 "D. That for the purposes of examining the clause of unjust enrichment to the importer in respect of subject refund claim we have verified the importer's Books of Accounts and other relevant documents and record of the goods. Based on such verification we have satisfied ourselves."
6. This was not a ground for rejection. We find no force in the submission. It is accordingly rejected.
7. Since the facts are identical, we are of the opinion that the operative portion of the order should be identical to the one in Yu Televentures (supra). It is hereby directed consequently that the petitioner's refund claim is, therefore, allowed. The respondents are directed to pay to the petitioner, the claimed amount together with interest due thereof upto the date of refund - which shall be done within three weeks from today."
12. It is to be noted the decision of the Yu Televentures Pvt. Ltd., (as cited herein above) was upheld by the Apex Court by dismissing the SLP filed by the Revenue by an Order dated 06.02.2017.
13. Further, I find that in the case of Intex Technologies (India) Ltd., in writ petition No. 10618/2016, Hon'ble High Court of Delhi by order dated 08.11.2016 (unreported), was again considering identical issue and one of the point which came before their Lordships is regarding refund claim in light of the decision of the Apex Court. Their Lordships in paragraph No. 6 of the order held as under:
"6. In the light of the law laid down by the Supreme Court in SRF Ltd., (supra) the Court is of the opinion that the claim in these proceedings has to succeed. A direction is issued to the respondents to process the petitioner's refund claim and pass appropriate orders having regard to the fact the petitioner had filed supporting certificates in the form of a Chartered Accountant's clarification/certificate etc. claiming that the benefit sought was not passed on to the customers. The respondents are further directed to pay the appropriate refund amount together with interest applicable till date of actual payment within three weeks from today."9
Appeal No. C/30153-30154/2018 The said order of the Hon'ble High Court was carried in SLP before the Apex Court, the Apex Court dismissed the SLP by order dated 07.07.2017.
14. Revenue Authorities were still not happy with the situation and in another consignment imported by Yu Televentures Pvt. Ltd., opined the same thing and rejected the refund applications filed by the petitioners. Petitioners in M/s Yu Televentures Pvt. Ltd., in writ petition No. 2102/2017 again moved to Hon'ble High Court of Delhi and their Lordships by an Order dated 26.07.2017 recorded detailed finding on the issue after considering various decisions/orders of the Hon'ble High Court of Delhi and held as under:
"24. It has been explained by learned counsel for the petitioner that no refund claim had yet been made in respect of the aforementioned B/Es during the financial year which ended on 31st March, 2015. Since the refund applications were submitted only during FY 2015-16, the outstanding refund in respect of these four B/Es could not have been shown in the balance sheet for FY 2014-15. Indeed, the mere fact that this amount was not shown as outstanding during the year 2014-15 would not mean that the petitioner is not entitled to claim refund. The petitioner cannot possibly be denied refund if it, in fact, did not pass on the burden of CVD to its customers.
25. What respondent No. 4 had to examine was whether the claim of the petitioner that it had not passed on the incidence of CVD in respect of the above B/Es for 27th March, 2015 to 31st March, 2015 to the customer was supported by proper documentation.
26. Here it is interesting to note that the petitioner submitted the same CA certificate and documents (including sales invoices) for the aforementioned period as well as for the period June and July, 2015. Respondent No. 4 has accepted these very documents for the claim in respect of June and July, 2015. Pertinently, respondent No. 4 observes in respect of those invoices as under :
"I find that the sales invoices of June, 2015 and July, 2015 produced by the importer do not reflect the CVD amount separately which, prima facie, indicate that the burden of SAD has not been passed on by the importer to their customers directly. Further, I have already taken note of the fact that the importer has submitted a Chartered Accountant's Certificate issued by M/s. Nayyar Maniar & Associates 10 Appeal No. C/30153-30154/2018 LLP, M. No. 502101, to the effect that certifying that the burden of CVD under this refund claim has not been passed on to the buyers and the refund being claimed is shown in their books of account/balance sheet for the year ended 31 March, 2016 as amount recoverable from the Customs. Accordingly, I hold that the provisions of unjust enrichment clause under Section 28D read with Section 27 of the Customs Act, 1962 are not applicable to the facts of this case and hence not invocable."
27. By the same yardstick, there was no reason whatsoever for respondent No. 4 not to accept the very same documents in respect of the imports between 27th March, 2015 and 31st March, 2015. The certificate of the CA is categorical that the incidence of CVD, even in respect of these imports, had not been passed on to the customers. Consequently, there was no valid justification for respondent No. 4 to have denied the refund claim."
15. It is noticed that identical/similar issue came up before the Hon'ble High Court of Karnataka in writ petition No. 45551- 45554/2016, which was disposed of the writ petition directing Revenue Authorities to sanction the refund, by holding that refund is eligible for granted to them.
16. Hon'ble High Court of Madras in the case of Micromax Informatics in writ petition No. 3486/2016 by order dated 18.04.2017 on identical set of facts held that refund is admissible.
17. On the face of authoritative judicial pronouncement on self same issue, I find that the Lower Authorities have erred in coming to a conclusion that the appellant herein has not passed the hurdle of unjust enrichment.
18. Respectfully following the authoritative judicial pronouncement on the same issue, I find that the impugned order to 11 Appeal No. C/30153-30154/2018 that extent contested in these appeals are unsustainable and liable to be set aside and I do so.
19. The impugned order is set aside on the question of unjust enrichment and the appeals are allowed with consequential reliefs.
(Order pronounced on ...................... in open court) M.V. RAVINDRAN MEMBER (JUDICIAL) Lakshmi....
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