TMI Blog2011 (3) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... de that the disputed cess amounts had been recovered as part of the FOB value. There is no dispute that provisions in the Act pertaining to levy, collection, refund, etc., apply to levy, collection, refund, etc., of cess levied under the APFPEC Act. As provisions relating to levy and collection are borrowed, the provisions relating to short levy, short payment, concomitant disputes and the remedies provided in Sections 128 and 129D(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. 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. v. CC (Appeals) [2002 (4) TMI 79 - SUPREME COURT OF INDIA] it is note that a Larger Bench of the Tribunal had considered the ratio of the above decision and the decisions of Flock India case [2000 (8) TMI 88 - SUPREME COURT OF INDIA] and Priya Blue Industries case [2004 (9) TMI 105 - SUPREME COURT OF INDIA] and held that a refund claim was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Appeals). It was submitted that the original authority had erred in holding that the principles of unjust enrichment did not apply to the impugned claims. Citing the judgment of the Apex court in the case of Solar Pesticides v. UOI [2000 (116) E.L.T. 401 (S.C.)], it was argued that the principle was attracted in all cases where incidence of duty had been passed on directly or indirectly to another person. As entered in the respective shipping bills, the FOB value realized by the exporter and reflected in the bank realization certificates, the FOB value realized was inclusive of the cess in dispute. The original authority had failed to examine the claims from unjust enrichment angle and had therefore arrived at an incorrect conclusion that the principles of unjust enrichment did not apply to the impugned refund claims. Before the Commissioner (Appeals), the assessee had submitted that there was nothing on record of the Department to show that the FOB value realized by the respective parties included the cess. The APFPEC Act stood repealed at the time the relevant exports were made and the cess was paid. A non-existent levy or tax could not be passed on. The appellants cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was repealed. He found that the FOB value in the shipping bill was inclusive of cess as entered in the shipping bill. All the exporters had failed to establish that they had compensated their buyers to the extent of cess amounts recovered. Realisation of full FOB value itself proved that incidence of cess had been passed on to the buyers. He set aside the impugned orders and allowed the appeals filed by the Department. 6. Appellants have raised several grounds seeking to vacate the impugned order. 6.1 M/s. Al Gyas Exports Pvt. Ltd. has submitted that the provisions of the Act relating to review and appeal were not made applicable to the APFPEC Act. Provisions of Sections 128 and 129D(2) were not adopted for the said APFPEC Act. As the APFPEC Act was repealed on 1-6-2006, proceedings initiated under the said Act subsequently were without authority of law. The review order against order of the original authority was barred by limitation as the same had been passed after 6 months from the date of speaking order. The appellant had not recovered the cess from the buyer and had borne the same by paying it as a percentage of FOB value. The assessee relied on the following case laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice for recovery of the refund already sanctioned was issued only to the CHA. As per several judicial authorities for instance CC v. Trivandrum Rubber Works Ltd. [1999 (106) E.L.T. 9 (S.C.)], service of demand notice on CHA was not a valid service on the assessee. (b) The Department had collected the disputed cess without the authority of law. (c) The effect of repeal of APFPEC Act is as if the said Act never existed. (d) The cess collected from the appellant was liable to be refunded. (e) The impugned order had been passed on conjectures. (f) The Revenue had filed only one appeal in the case of the assessee instead of seven as there were seven Orders-in-Original sanctioning refund. (g) The original authority had examined the aspect of unjust enrichment though the impugned order found to the contrary. (h) The contracts of the assessee with its buyers showed that export duties and levies would be borne by the appellant. The finding to the contrary was erroneous. (i) The definition of FOB in Incoterms, 2000 relied upon by the Commissioner (Appeals) supports the case of the appellant. (j) The assessee relied on the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... galore City Corporation [1997 (91) E.L.T. 27 (S.C.)] which held that refund was not deniable when the realization of tax or money was held to be without authority of law. (t) As held in CCE v. Pawan Tyres Private Ltd. [2000 (126) E.L.T. 1061 (T)], when the invoice showed composite price and duty was not indicated separately, the incidence of duty was not passed on to the buyers. 6.3 In the written submissions dt. 19-1-2011 furnished subsequent to hearing, it is submitted that the argument of Revenue that the appellants had to challenge the assessment to claim refund was bereft of merit because there was no valid and legal assessment but an electronic shipping bill clearance through a machine-interface and let exports were allowed only after cess was paid. There could have been no assessment of repealed levy. The Department s reliance on the Apex Court judgment in Priya Blue Industries [2004 (172) E.L.T. 145 (S.C.)] was mis-placed. Considering that there was an assessment, the same was contested by filing refund claim; challenge to the assessment could be by seeking refund/re-classification also, as held by Supreme Court in Karnataka Power Corporation Ltd. v. CC (A) [2002 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llected without the authority of law was contrary to Article 265 of the Constitution of India. They relied on the judgment of the Supreme Court in the case of D. Cawasji Co. v. State of Mysore [1978 (2) E.L.T. (J154) (S.C.)] where it was held that tax paid under mistake of law had to be refunded irrespective of the time when tax had been paid provided the writ petition or the suit for the purpose was filed within three years from the discovery of the mistake. Refund could not be rejected on the ground of unjust enrichment. In the case of Calcutta Paper Mills Manufacturing Co. v. CEGAT Others [1986 (25) E.L.T. 939 (Cal.)], it was held that the ground of unjust enrichment as a defence against the claim of restitution had been rejected by the various High Courts and the Supreme Court on the ground that the duty was collected without the authority of law was refundable even though it was recovered from the customers and manufacturers and granting relief of refund may result in unjust enrichment. Theory of unjust enrichment could not be invoked in a case of refund of excise duty recovered from the manufacturer without the authority of law. In the case of Parle Products Another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional, refund claim had to pass the test of unjust enrichment. (g) LMJ International Ltd. [2004 (178) E.L.T. 643 (Tri. - Kol.)] Refund claim pertaining to cess under Agricultural Produce Cess Act, 1940 also governed by the Customs Act, 1962. Appellants claim that refund claim not governed by Section 27 rejected. (h) Microland Ltd. [2006 (206) E.L.T. 262 (Tri. - Bang.)] The Tribunal held that every refund has to be examined from unjust enrichment point at all time from the date of amending provisions relating to refund under the Customs Act. (i) Modipon Fibre Co. [2004 (173) E.L.T. 168 (Tri. - Del.)] The Tribunal held that the assessee cannot be allowed gains from Government and customers. (j) Priya Blue Industries [2004 (172) E.L.T. 145 (S.C.)] The Supreme Court held that without assessment order having been modified in appeal or reviewed, a claim for refund cannot be maintained. Ld. Jt. CDR also placed relied on para 137 of the Apex Court s judgment in the case of Mafatlal Industries (supra). 8. We have examined the case records and carefully considered the submissions made by the parties. The im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... richment means retention of a benefit by a person that is unjust or inequitable. Unjust enrichment occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. 32. The doctrine of unjust enrichment , therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of unjust enrichment arises where retention of a benefit is considered contrary to justice or against equity. 33. The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution. 34. .. 35. .. 36. The above principle has been accepted in India. This Court in several cases has applied the doctrine of unjust enrichment. 37. In Orient Paper Mills Ltd. v. State of Orissa, (1962) 1 SCR 549, this Court did not grant refund to a dealer since he had already passed on the burden to the purchaser. It was observed that it was open to the Legislature to make a provision that an amount of illegal tax paid by the persons could be claimed only by them and not by the dealer and such restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Governments, the appellants continued to charge tax from consumers/customers. 47. .. 48. From the above discussion, it is clear that the doctrine of unjust enrichment is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/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. The above observations made by a three Member Bench of the Apex Court make it clear beyond doubt that even in the absence of statutory provision to deny benefit of refund of an erroneous levy when passed on to customer, refund of the same cannot be allowed. It is imperative that the assessee establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to imported goods and also to exported goods. There is no warrant to restrict the application of the ratio of the Hon ble Supreme Court only in respect of imported goods as the issues like assessment, refund are common in respect of both imported goods as well as exported goods. 12. As regards the objection raised by M/s. ITC Ltd. that the Department had filed only one appeal instead of six considering the orders-in-Original (including one corrigendum), we note that the Act does not bar a person aggrieved by a number of decisions of an officer of Customs lower in rank than a Commissioner of Customs filing a single appeal to the Commissioner (Appeals). We note that the challenge to the impugned order raised by M/s. ITC Ltd. on the ground mentioned at a of para 6.2 above is met by the submission by the appellant at q of the same sub-para. As regards the challenge raised by M/s. Al Gyas Exports Pvt. Ltd. that the APFPEC Act did not adopt provisions in the Act covering review, appeal, etc., of Sections 128 and 129D(2) of the Act, we note that the relevant provisions of Section 3 of the APFPEC Act reads as follows :- 3. Duties of Customs on Scheduled products. - (1) The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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