TMI Blog2011 (1) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... -811, 783, 784, 790, 791/07 - - - Dated:- 19-1-2011 - Hon'ble Mr. M.V. Ravindran, Member(Judicial) Hon'ble Mr. P. Karthikeyan, Member(Technical) Appearance Mr. A.K.S. Murthy, Mr. K.S. Ravishankar, Mr. T.Ramesh and Ms.Mona, Advocates for the appellants. Mr. D.P. Nagendrakumar, Jt.CDR and Ms. Sudha Koka, SDR for the Revenue. Per P. Karthikeyan These appeals are filed by the following parties assailing a common order of the Commissioner(Appeals) No.3 to 23/2007(V-II)(D)CUS dt. 4/9/2007, vide which he rejected the claims for refund of the appellants. The particulars of refund claimed by the parties are given below:- Sl.No. Party name Amount 1 M/s. ITC Ltd. Rs.6,40,998/- 2 M/s. Prathyusha Associates Rs.6,40,998/- 3 M/s. Foods, Fats Fertilisers Ltd. Rs.1,06,241/- 4 M/s. Asia Pacific Commodities Ltd. Rs.4,24,965/- 5 M/s. Al Gyas Exports Pvt. Ltd. Rs.6,02,170/- 6 M/s. Shivnath Rai Harinarain (India) Ltd. Rs.2,58,627/- 2. The common facts of the appeals are that appellants are export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Del.)] is relevant in deciding the case. In the said decision, the Tribunal had observed that price was determined from cost of production, raw material, taxes and duty and no manufacturer would sell his goods at loss, though he may reduce profit margin to compete in the market in case of enhancement of duty. 4. As per the definition of FOB in the "Incoterms, 2000", an International Chamber of Commerce Official Rules for the interpretation of trade terms, Free on Board (FOB) means that, the seller delivers when the goods pass the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term can be used only for sea or inland waterway transport. A. The seller's obligation. A6. Division of costs: The seller must, subject to the provisions of B6, pay i. All costs relating to the goods until such time as they have passed the ship#s rail at the named port of shipment; and ii. Where applicable, the costs of customs formalities necessary for export as well as all duties, taxes and other charges payable upon export." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes by mistake. The appellant therein was directed to approach the Tribunal which would deal with the application as an appeal and decide the issue on merits. c. Doctor Beck Co. (India) Ltd. Vs. Assistant Collector [1991(51) ELT 263 (Bom.)] affirmed by Hon#ble Supreme Court reported at 1998(98) ELT A71 (SC). The High Court had held that plea of limitation was not available to the Department in view of the finding of the Assistant Collector that duty had been paid under mistake of law. Refunds could not be rejected on the ground of unjust enrichment unless the Department could establish that tax burden had been shifted to the customers. Their lordships noted that in the case of New Industries Ltd. Vs. UOI [1990(46) ELT 23 ] a full Bench of the High Court had decided that it was necessary for the court to ascertain that tax burden had been shifted by the assessee and it was for the Department to establish that the tax burden had been shifted by the assessee to the customers. It is submitted that in the case on hand this requirement was not met by the Department. d. Hind Agro Industries Ltd. Vs. CC [2008(221) ELT 336 (Del.)] In this case, the Delhi High Court vacated an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary. m. The Commissioner(Appeals) had placed wrong reliance on Solar Pesticides case since the said decision applied where refund claim was of #duty#. Moreover the facts were dissimilar. The Assistant Commissioner had not been authorized to file appeal on this ground by the CCE, Visakhapatnam. n. As the amount claimed was not duty as per the Customs Act, the provisions applicable to duty of customs should not be applied to claim for refund of cess under APFPEC Act repealed w.e.f. 01/06/2006. o. The impugned order wrongly ignored the submission relying on Article 265 of the Constitution which mandated that no tax shall be levied or collected except by authority of law. p. The amounts collected without authority of law are to be refunded and cannot be retained with the Department. q. The Commissioner(Appeals) had not appreciated the law of agency. An agent acted on behalf of principal and the acts of the agents were binding on the principal. It was erroneously held that the appellant had not produced evidence of having paid the agents the amounts of cess paid by them. r. It was against Dharma for the public authorities to retain people#s money after discovering that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Tribunal had held that Section 27 of the Act applied for refund of cess collected under APFPEC Act by virtue of sub-section 3 of Section 3 of the said Act which had made, inter-alia, provisions relating to refunds in the Customs Act applicable to levy and collection of cess under the APFPEC Act. The Tribunal also observed that the Supreme Court in the case of Mafatlal Industries Ltd. Vs. UOI [1997(89) ELT 247 (SC)] had held that Section 27 of the Customs Act contained machinery for refund of amount wrongly collected and the same had to be refunded within the provisions of Act. c. In the case of CCE, Hyderabad-III Vs. Kumar Metallurgical Corporation Ltd. [2008(221) ELT 519 (Tri. Bang.)], it was held that duty element shown in invoice did not mean that the duty was passed on to the buyer. When excess duty was not payable on the goods involved, contracted price did not include the duty. The respondent M/s. Kumar Metallurgical Corporation Ltd. was held eligible for refund and unjust enrichment was held to be not involved. 6.5. In the appeal filed M/s. Shivnath Rai Harnarain (India) Ltd., the appellant relied on its contract with the buyer which provided that the seller unc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be allowed under Section 27(1). c. Allied Photographics India Ltd. [2004(166) ELT 3 (SC)] Uniformity in prices before and after assessment did not lead to inevitable conclusion that incidence of duty had not been passed on to buyer as such uniformity may be due to various factors. d. Sahakari Khan Udyog Mandal Ltd. [2005(181) ELT 328 (SC)] The Apex court held that before claiming a refund, the appellant has to show that he had paid the amount for which relief was sought and he had not passed on the burden to the consumer and if such relief is not granted, he would suffer loss. Doctrine of unjust enrichment based on equity could be invoked to deny the benefit of which a person is not otherwise entitled irrespective of applicability of Section 11B of Central Excise Act, 1944. e. Gujarat Co.-op. Milk Marketing Federation Ltd. [2007(220) LET 914 (Tri. Ahmd.)] Export goods required to be subjected to assessment and Section 17 of the Act applicable to export goods also. Impugned order upheld rejection of refund claim of cess paid in pursuance of assessment though incorrect. f. Rice India [2009(237) ELT 50 (Tri. Mum.)] Sugar cess was held not leviable on imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OB value includes the cess paid on export of rice especially in cases where the contract with the foreign buyer specifically provided that the export duty / taxes etc. were to the account of the seller. In all the cases except in the case of M/s. Al Gyas Exports Pvt. Ltd., the appellants have furnished copies of the relevant contracts containing the above clause. Unless the Department is satisfied on examination of the documents showing remittance received by the appellants, the finding in the impugned order that the FOB value recovered included the impugned cess cannot be sustained. As it is, there is no reliable finding in the impugned order to conclude that the disputed cess amounts had been recovered as part of the FOB value. The appellant M/s. Al Gyas Exports Pvt. Ltd. has raised certain legal issues as regards the applicability of provisions relating to review and appeal in the Act in respect of cess levied under APFPEC Act. This appellant also raised another objection that the review orders were passed beyond the time allowed under the Act. 9. We find that in the Sahakari Khand Udyog Mandal Ltd. case (supra), the Apex Court made the following observations:- 31.?Stated si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrongfully paid can be claimed on the basis of doctrine of equity and a person demanding such restitution must plead and prove that he had paid such tax/duty and had suffered loss/injury. The burden is on the petitioner to prove that the tax/duty paid by him is not passed on to customers or third party and that he is entitled to restitution. 46.?A reference may also be made to a recent decision of the Constitution Bench in Godfrey Phillips India Ltd. Another v. State of U.P. Ors., Writ Petition (c) No. 567 of 1994, dated January 20, 2005. In that case, constitutional validity of Uttar Pradesh Tax on Luxuries Act, 1995 as also other State Acts was challenged inter alia on the ground of legislative competence of the State Legislatures. The Court allowed the petition and held that the State Legislatures were not competent to impose luxury tax on tobacco and tobacco products and the Acts were declared ultra vires and unconstitutional. In the intervening period, however, tax was collected by the appellants from consumers and also paid to the State Governments. In certain cases, interim relief was obtained by the appellants from this Court against recovery of tax and as alleged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills involved was successfully challenged. The plea of the appellants that the impugned payments did not follow assessment cannot be countenanced. Revenue has rightly relied on the decision of the Tribunal in the Gujarat Co.-Op. Milk Marketing Federation Ltd. case (supra). We note that the Tribunal had made the following observations:- 7.?As regards the submission that no assessment per se is done in respect of export consignments the same is not acceptable. The definition of many terms in the Customs Act like duty, assessment, prohibited goods, value, refers to both imported and export goods. In particular, Section 17 clearly deals with the assessment of both imported goods as well as export goods. Therefore, I hold that the exported goods are required to be subject to assessment. In the present, the cess has been paid only in pursuance of an assessment order. It was not a case of no assessment but a case on incorrect assessment leading to consideration refunds. 8.?Having held that there is assessment for exported goods the next issue for consideration is whether the ratio of the Hon'ble Supreme Court in the case of M/s. Priya Blue will only apply to assessment in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions relating to short levy, short payment, concomitant disputes and the remedies provided in Section 128 and 129 D(2) of the Act should also be held to have been borrowed for the purpose of APFPEC Act by virtue of the above sub-section. Therefore, we reject the objection raised by M/s. Al Gyas Exports Pvt. Ltd. 13. As regards the claim that a refund claim for excess duty paid can be validly made without challenging assessment under the act relying on the judgment of the Apex Court in the case of Karnataka Power Corporation Ltd. Vs. CC(Appeals) [2002(143) ELT 482 (SC)], we note that a Larger Bench of the Tribunal had considered the ratio of the above decision and the decisions of the Apex Court in Flock India case and Priya Blue Industries case and held that a refund claim was not maintainable unless the assessment order in pursuance of which duty paid was challenged and modified / set aside. In the case of Maharashtra Cylinders Pvt. Ltd. Vs. CESTAT, Mumbai Ors. reported as 2011 (183) ECR 0059 (Bom.), the Hon'ble High Court of Bombay has observed as follows:- 8.. .. .The Apex Court in the case of Priya Blue Industries Ltd. Vs. Commissioner of Customs (Preventive) AIR 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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