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2009 (8) TMI 462

..... to the original authority to reconsider the refund and grant the same without applying the provisions of unjust enrichment on the ground that in the facts and circumstances of the case, the said provisions are not applicable and has further directed that refund due to the respondent herein should be granted and for the said purpose the matter has been remanded. Held that- we are of the view that the arguments of the doctrine of ‘unjust enrichment’ being not attracted to the case of adjustment can be accepted only up to the stage when the imported goods are actually not physically removed from the customs charge, in the sense that the goods were not available to the assessee for being transacted as a trading proposition or a business proposition and if it had actually been cleared out of customs charge and was available to the assessee for being transacted, then even in a case of adjustment, the doctrine of ‘unjust enrichment’ cannot be kept out, but has to be verified on facts as to the possibility of the duties being passed on to the consumers or absorbed by the assessee. When the Original authority examines this question, it will have to necessarily bear in mind all these legal a .....

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..... ct, 1962? 3. Brief facts leading to the filing of this appeal by the revenue are that respondent herein imported 2984.420 MT of RBD Palmolein oil as per bill of entry No. 185/2001 dated 10-8-2001 through Karwar Port and bonded it in tank No. 4 of M/s. Konkan Storage & Systems Pvt Ltd., Karwar on 16-8-2001. The said bill of entry has been assessed at die existing tariff value of 372 US dollars per metric ton on 10-8-2001. Subsequently respondent have sought for Ex. bond bill of entry F. 216/01 dated 27-9-2001 for clearance of 500 MT of RBD palmolien oil which has been assessed provisionally at 372 US dollars per MT and Customs out of charge was given on the same day i.e., 27-9-2001 after payment of Customs duty. However, it seems that respondent has only removed 97.510 MT of the said cargo from the bonded tank up to 8-10-2001 leaving a balance of 402.490 MT of cargo which was lying in the bonded tank. 4. It seems that Notification No. 52/2001-Cus. (N.T.), dated 9-10-2001 came to be issued by which the tariff value of RBD palmolien was reduced from 372 US dollars per MT to 307 US dollars per MT. Thereafter respondent requested for refund of difference of Custom duty and interest .....

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..... estions of law in favour of the appellant. 7. Per contra Sri. Rajesh Chander Kumar contends that Section 15(1)(b) of the Customs Act itself provides that actual removal of the goods which entails the goods to be excisable to tax and unless the goods are not actually removed the duty would not become payable and in the instant case the provisional assessment having taken place on 27-9-2001 in respect of entire 500 MT RBD palmolein oil which has been paid requires to be refunded to the extent of 402.490 MT of R.B.D. plamolein which had remained in the bonded tank and had not been removed as admittedly notification dated 9-10-2001 came to be issued by reducing the tariff value from 372 to 307 US dollars and accordingly contends the questions of law has to be answered against the revenue and in favour of the importer respondent and prays for dismissal of the appeal. 8. We have heard Sri. T.M. Venkata Reddy learned standing counsel for the appellant and Sri Rajesh Chander Kumar appearing for the respondent and we have perused the orders of the adjudicating authority as well as the Appellate Authority and have given our anxious consideration. 9. The main issue revolving around the granti .....

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..... d the plea put forward by the importer which was to the effect that the importer had sold oil at a lesser price than the landed cost. The loss incurred being more or less similar to duty paid and by preponderance the Tribunal has come to the conclusion that the plea of incidence of duty is not passed on to the actual customers would have to be accepted and accordingly accepted the same without examining the records as to entitlement or otherwise. From the order of the Adjudicating Authority as well as from the order of the Tribunal we find that it is not based on facts and there is no conclusive finding with reference to material on record. The importer has contended before the Adjudicating Authority by placing material like sales invoice, break up of rate of cargo, operational costs, custom duty, profit/loss by way of statement which are factors which ought to have been gone into by the Adjudicating Authority to ascertain the actual cost or otherwise of the goods in order to entertain and grant the relief of refund of Customs duty which exercise is admittedly lacking. The finding of the second Appellate Authority not being based on facts and there being no discussion on these aspe .....

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..... ion (2): PROVIDED FURTHER that the limitation of one year or six months, as the case may be, shall not apply where any [duty and interest, if any, paid on such duty] has been paid under protest: PROVIDED ALSO that in the case of goods which are exempt from payment of duty by a special order issued under sub­section (2) of section 25, the limitation of one year or six months, as the case may be, shall be completed from the date of issue of such order.] [Explanation I]: For the purposes of this sub-section, the date of payment of [duty and interest, if any, paid on such duty] , in relation to a person, other than the improper, shall be construed as the date of purchase of goods by such person. [Explanation II: Where any duty is paid provisionally under section 18, the limitation of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after the final assessment thereof.] In explanation II it has been clearly specified that if the duty is paid provisionally under Section 18, the limitation of one year or six months should be computed from the date of adjustment of duty after the final assessment. In the instant case the adjudicating auth .....

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..... e said application is within the time limit of one year or six months as the case may be and if it is within the limitation, pass orders as observed herein above. (d) We allow the appeal and substantial questions of law 1 to 4 is answered in the negative in favour of the appellant and against the respondent. Question No. 5 is not answered and the same is kept open as the matter is remanded to the adjudicating authority. (e) No order as to costs. ORDER ON FOR BEING SPOKEN TO 14. While disposing of this appeal by the revenue in terms of our judgment dated 27-8-2009, appeal was allowed and the matter remanded to the original authority. 15. Assessee, though may get a refund amount, whether the amount has to be actually parted in favour of the assessee or to be remitted to the Consumer Welfare Fund due to applicability of the doctrine of unjust enrichment , was a question which was necessarily to be answered with reference to the facts of the case, particularly, as to whether the assessee in fact had passed on the liability to the consumer or had absorbed the tax burden by itself and there being no question of unjust enrichment and as the facts to arrive at the answer to this question h .....

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..... ner/appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. which is supportive of a positive answer in respect of question No. 5 extracted above. 20. Sri Rajeshchandra Kumar, learned counsel for the assessee would point out that in the first instance, question as framed is not satisfactory; that perhaps it would have been more appropriate, had the question been more specific, in the sense that the question would have arisen only if it was a case of finalisation of the assessment and not merely a provisional assessment under Section 18 and after finalisation of the assessment for own consumption of the goods etc. An application under Section 27 of the Customs Act, if it is within time as specified in the section and in such circumstance, the question would limit as to whether an application under Section 27 results in a refund; further the question as to whether the refund amount nevertheless not being distributed to the assessee on the applicability of the doctrine of unjust enrichment would get attracted and the question may merit examination only at that stage .....

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..... ment, whether it remained as a provisional assessment under Section 18 or had it gone further and had resulted in a finalisation of the assessment or even as to whether the provisional assessment itself had been finalised or not. In such a scenario, answering the question in the affirmative may not be a very satisfactory resolution and, therefore, keeping the question open, the matter can be remanded to the original authority even to ascertain as to at what stage, the claim for refund was made by the assessee even though it is termed as a claim for refund in terms of the judgment of the Supreme Court in Allied Photographies India Ltd s case, it being only a question of adjustment, if it was not even a finalisation of a provisional assessment, then the question of applicability of doctrine of unjust enrichment would not arise and the question would have to be answered in this background. 23. While we appreciate the submissions made by Sri Rajesh chandra Kumar, we also notice that whether a duty payment by an importer initially in the form of a deposit and later as a provisional payment and much later on the finalisation of the assessment as customs duty are all only towards the disc .....

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