9911796707
TMI Blog2000 (2) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. In order to decide the aforesaid issue, we need refer to the facts in the case of Civil Appeal No. 921 of 1992 filed by the Union of India against Solar Pesticide Private Limited (hereinafter referred to as 'the respondent'). The respondent imported copper scrap for use as a raw material in the manufacture of copper oxychloride. At the time of import of copper scrap the respondent sought exemption from payment of Additional customs duty (also known as countervailing duty or CVD) which was available under the Customs Notification No. 35/81-C.E., dated 1-3-1981. At the time of clearance this duty was paid, subsequently, the respondent filed an application for refund of additional customs duty paid by it at the time of import of copper scrap claiming benefit under the aforesaid exemption Notification of 1-3-1981. The Assistant Collector of Customs, by order dated 16-2-1985, rejected the claim and held that the imported copper scrap was correctly assessed to CVD @ Rs. 3,300/- per M.T. 3. Three years after the rejection of the said claim, a writ petition was filed by the respondent in the Bombay High Court. It was claimed therein that the aforesaid exemption Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the payment of the countervailing duty. We, therefore, proceed on the assumption that the decision of the High Court that the respondent was entitled to the said benefit was correct and it would, normally be entitled to refund of the said duty which it had paid. 7. On behalf of the appellant, the learned Attorney General contended that a nine Judges Bench of this Court in Mafatlal Industries Ltd. v. Union of India [1997 (89) E.L.T. 247 (S.C.) = (1997) 5 SCC 536] has upheld the validity of the amended Section 27 of the Act. He submitted that the perusal of sub-section 2 of Section 27 of the Act shows that onus was on the importer to prove that he had not passed on the incidence of duty to any other person before he could claim refund of the amount of duty paid by him. 8. Learned Counsel appearing on behalf of the respondent in this appeal, however, contended that sub-section 2 of Section 27 of the Act cannot be read in isolation. The said provision has to be read with Sections 28C and D of the Act and the principle of unjust enrichment could not apply in the case of captive consumption of the imported raw material. 9. Before considering the rival contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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. (2) If, on receipt of any such application, the Assistant Commissioner of Customs is satisfied that the whole or any part of the duty and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of duty and interest, if any, paid on such duty as determined by the Assistant Commissioner of Customs under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to - (a) the duty and interest, if any, paid on such duty paid by the importer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (b) the duty and interest, if any paid on such duty on imports made by an individual for his personal use; (c) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of sub-section (2) of Section 27 of the Act. 12. Sub-section (1) of Section 27 of the Act provides for making of a claim for refund of duty, in certain cases duty and interest, and the period of limitation within which such a claim has to be made. This sub-section, inter alia, provides that the applicant will have to establish that the amount of duty and interest in relation to which the refund is claimed was collected from, or paid by him and the incidence of the duty and interest, if any, had not been passed on by him to any other person. Sub-section (2) of Section 27, which applies in the present case, provides that if the Assistant Commissioner is satisfied that whole or any part of the duty/or interest is refundable, then an order shall be made accordingly to that effect and the amount so determined shall be credited to the fund. The word "fund" means, according to Section 2(21A) of the Act, the Consumer Welfare Fund established under Section 12C of the Central Excises and Salt Act, 1944. 13. Clause (a) of proviso to sub-section (2) of Section 27 of the Act however stipulates that the amount of refund which is found due will not be credited to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to in Section 28C) to establish that the amount of duty, in respect to which refund is claimed, was collected or paid by him and incidence of such duty had not been passed on by him to any other person. 17. The use of the words "incidence of such duty....." is significant. The words "incidence of such duty" mean the burden of duty. Section 27(1) of the Act talks of the incidence of duty being passed on and not the duty as such being passed on to another person. To put it differently the expression "incidence of such duty" in relation to its being passed on to another person would take it within its ambit not only the passing of the duty directly to another person but also cases where it is passed on indirectly. This would be a case where the duty paid on raw material is added to the price of the finished goods which are sold in which case the burden or the incidence of the duty on the raw material would stand passed on to the purchaser of the finished product. It would follow from the above that when the whole or part of the duty which is incurred on the import of the raw material is passed on to another person then an application for refund of such duty would not be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State i.e. by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we wish to emphasize 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 any body else. 22. The High Court in considering the question of the applicability of the doctrine of unjust enrichment had relied upon the decision of this Court in HMM Limited & Anr. v. Administrator, Bangalore City Corporation, Bangalore and Anr. [1997 (91) E.L.T. 27 (S.C.) = [1989] Supp. 1 SCR 353]. That case pertained to the levy of octroi on goods on their entry into the city limits. Octroi had been collected on the said goods even though there was no use or consumption within the Municipal limits. This Court held that the amount of octroi paid was refundable. In this context, a contention had been raised on behalf of the Corporation that refund could not be given because there was a possibility of undue enrichment of the claimant. This Court did not accept this contention and came to the conclusion that octroi was a duty on the entry of raw material which was payable by the producer or manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment of the High Court is set aside, the effect of which would be that the writ petition filed by the Solar Pesticide Pvt. Ltd. stands dismissed. Writ Petition (C) No. 189 of 1993 filed by M/s. Solar Pesticides Pvt. Ltd. in this Court also stands dismissed. No costs. Civil Appeal No. 4381 of 1999 25. In the above noted matter the respondent had imported prime quality hot rolled steel in coils on which duty was paid. A claim was made for the refund of the duty on the basis of the classification of the goods. Ultimately the respondent succeeded and the Collector (Appeals) Bombay directed the refund of the excess duty paid. 13 applications for refund were filed and the Assistant Collector grouped them as follows : (i) Claims based on bill of entries at serial numbers 1-6 in the list which were received by the department on 22-6-1989, (ii) Claims relating to bills of entries at serial numbers 7-9, and (iii) Claims arising out of rest of the 4 bills of entries. With regard to the first category the Assistant Collector held that the claims were barred by limitation. Claims falling under the second category were held by him to be not maintainable in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty had not been passed on to the consumer and the principle of unjust enrichment did not apply. The second contention was that in any event, in view of the decision of the Bombay High Court in the case of Solar Pesticides (India) Limited v. Union of India, 1992 (57) E.L.T. 201, the principle of unjust enrichment was not applicable in cases of captive consumption. Neither the Assistant Commissioner nor the Commissioner (Appeals) accepted any of the two contentions. It was held that the respondent had failed to prove that the incidence of duty in respect of the imported goods had not been passed on. 30. On Appeal filed by the assessee, the Tribunal allowed the same following the decisions of the Bombay High Court in Solar Pesticides (India) Limited v. Union of India, 1992 (57) E.L.T. 201, which we have now held is not a good law. The Tribunal did not decide as to whether the assessee had passed on the incidence of duty to the consumer. That contention would require consideration. Accordingly, we allow this appeal, set aside the judgment dated 6-7-1999 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi and direct it to decide the appeal by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
