TMI Blog2013 (12) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants have only tried to establish that after the higher duty paid cost of CD pick up lense is added in the manufacturing cost, the same comes to Rs.123/- which is admittedly higher than the unit sale price of the goods - If that be so, the differential duty paid on the imported goods i.e. CD pick up lense unit cannot be said to have been collected by the assessee from their customers - appellant has not recovered said amount from their customers and as such, the refund is not hit by provisions of unjust enrichment - Decided in favour of assessee. - Customs Appeal No. 705 of 2008-Cus (DB) - - - Dated:- 3-10-2013 - Archana Wadhwa And Manmohan Singh, JJ. For the Appellant : Shri Prabhat Kumar, Adv. For the Respondent : Shri A K Jain, AR PER : Archana Wadhwa After hearing both sides duly represented by Shri Prabhat Kumar, learned advocate appearing for the appellant and Shri A.K. Jain, learned AR appearing for the Revenue, we find that appellant imported items declared as "CD" pick up Sense Unit and a part of CD Deck apparatus picture be assembly in terms of provisions of Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present appeal is as to whether the appellants have collected this extra duty from their customers and has to be hit by provisions of unjust enrichment or they themselves absolve said duty so as to hold that same does not stand recovered by them from their customers. 5. It is seen that the period involved in the present appeal is from September, 2003 onwards i.e. from October, 2003 to March, 2004. The appellants have taken a categorical stand before the lower authorities that the average sales price for two period i.e. from July to September, 2003 and from October, 2003 to March, 2004 are the same, and is further lower in the subsequent period. The final product was being sold by the appellant at Rs.123/- during the period prior to period involved in the present appeal. The sale value of the same came down to Rs. 114.40 per piece during the relevant period, i.e. October, 2003 to March, 2004, when they paid the higher amount of duty on the imported parts. They have produced on record the detailed chart showing the cost factor of their final product in respect of two periods. They have also placed on record a certificate from their Chartered Accountant indicating that duty paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per piece whereas the appellant was selling their CD mechanism during the relevant period at Rs. 114.40 . The lower authorities have examined the above Chartered Accountant certificate and has not been able to give any valid reasons to reject the same. Commissioner (Appeals) has referred to charts placed on record by the assessee. In Chart No. 1, they have shown the landed cost of CD pick up lense unit as Rs.94.30 and total cost of CD deck mechanism comes to Rs. 110.50. In Chart No. 2 they have taken into consideration the higher landed cost of CD pick Up lense unit as Rs/109.49 i.e. after payment of higher Customs duty. Whereas the sale price of the same was lesser than the manufacturing cost. The difference in the landed cost of CD pick up lense unit has resulted in higher manufacturing cost. But the final product being cleared at lesser value, cannot be said to have included the higher duty paid by the appellant. 8. Commissioner (Appeals) while examining the above two charts has held that appellant was adding landed cost of lense unit, which is inclusive of customs duty paid by them. As such, he has further observed that where the appellant have sold the goods by including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still contesting the levy of customs duty on the product imported by them in an appeal before the CEGAT. They therefore, would not have known whether they would succeed in their appeal and if successful, consequently how much amount they would get from the department as refund. It, therefore, would have been highly presumptuous on their part to reflect an amount in their books of account as due from the customs department, the receipt and the quantum of which was still in limbo." 10. As such, we find that observations made by the appellate authority that the appellant has not shown this amount as due from the Revenue their balance sheet cannot be appreciated, in view of the Tribunal's order. 11. At this stage, we may examine some of other precedent decisions as relied upon by the learned advocate. In the case of CCE vs. Manjunath Food and Packaging P. Ltd. reported in [2009 (239) ELT A 22] it was held that as the duty was paid under protest, the question of unjust enrichment does not arise. Hon'ble Supreme Court in the case of Living Media India Ltd. reported as 1998 (104) E.L.T. 3 (S.C.) has held that when the cost of the raw materials for bringing out the news magazines excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me went up by an amount much less than the amount of duty/differential duty, it has to be concluded that the incidence of higher rate of duty was passed on to the customers, in the present case, we note that the sale price of the final product, instead of going up on account of higher duty paid by the appellant, has, in fact gone down. This stand explained by the Id. Advocate that on account of fast changing technology in electronic goods, the models become obsolete and have to be cleared at lower prices on account of changing market trends. In such a situation, it cannot be said that the higher duty paid by then at the time of imports, on an objections raised by the revenue, and when the importer has won the issue on merits till the Tribunal level, is not required to be refunded to them especially when we notice that the same does not stand recovered by them from their customers. 14. In view of the foregoing discussions, we are of the view that the appellant has not recovered said amount from their customers and as such, the refund is not hit by provisions of unjust enrichment. Accordingly impugned order is set aside and appeal is allowed with consequential relief to the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d December 2003 did not form part of total cost of the production of the finished goods manufactured during those months nor any costing record was produced before the authority below to satisfy use of the imported input without duty element in manufacture of finished goods. The copy of Chartered Accountant's Certificate dated 04.05.2006 available in the paper book at page 148 is a bald statement without determination of the total cost Bill of entry wise use of the input during different months and sale price determined accordingly to demonstrate that the total cost did not include customs duty element. 19. The Balance Sheet copy available at page 161 to 165 of the paper book no where shows recoverable additional customs duty from the Government. The Certificate of Chartered Accountant does not disclose whether refund if any receivable from Govt. was disclosed in the Balance Sheet since Certificate was dated 04.05.2006 where as Balance sheet was prepared much before that date. The certificate without showing the list of records examined leaves doubt as to whether examination of facts and figures really done. A certificate of Chartered Accountant not being conclusive proof as has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such a situation has not been contemplated under the Act. Further, Section 27 mandates on the importer to produce such documents or other evidence while seeking refund to establish that the amount of duty in relation to which such refund is claimed, has not been passed on by him to any other person. 9. Therefore, considering the above said provisions and applying the same to the facts on hand, we are of the opinion that the Tribunal has committed an error in merely relying upon the certificate produced by the first respondent without taking into consideration of the fact that no evidence has been produced for considering the claim of refund. The Tribunal also relied upon the Judgment of Commissioner of C.Ex., Coimbatore v. Flow Tech Power reported in 2006 (202) E.L.T. 404 (Mad). The said Judgment is not applicable to the present case on hand and the Tribunal has wrongly relied upon the said Judgment. This Court in the said Judgment has clearly held that the certificate issued by the Chartered Accountant along with other evidence such as Profit and Loss Account are sufficient evidence to consider the claim for refund. The said Judgment cannot be construed to lay down the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution. 34. In the leading case of Fibrosa v. Fairbairn, (1942) 2 All ER 122, Lord Wright stated the principle thus: "...(A)ny civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution. 35. Lord Denning also stated in Nelson v. Larholt, (1947) 2 All ER 751; "It is no longer appropriate, however, to draw a distinction between law and equity. Principles have now to be stated in the light of their combined effect. Nor is it necessary to convass the niceties of the old forms of action. Remedies now depend on the substance of the right, not on whether they can be fitted into a particular framework. The right here is not peculiar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 case where it is passed on indirectly. This would be a case where the duty paid on raw material is added to he 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 allowed under Section 27(1) of the Act"[Emphasis supplied]. 25. When the appellant pleads that it had sold the goods at loss, it is unbelievable because its copy of profit and loss account at page 159 of the paper book for the year ending 31/03/2004 shows profit of Rs. 6,10,435.95 for the financial year 2003-04. Apex Court has rightly held that no prudent business man would prefer to suffer loss as has been recorded in para 91 of the judgment in case of Mafatlal Industries Ltd. (ibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will from part of the price at which such goods are to be sold. 28D. presumption that incidence of duty has been passed o to the buyer. - Every person who has paid the duty on any goods under this a/Act shall, unless the contrary is proved by him, be demand to have passed on the full incidence of such duty to the buyer of such goods." Further, Supreme Court in Solar Pesticides case has observed as follows: "Sections 28C and D of the Act have been included in the new Chapter VA whose heading is "Indicating amount of duty in the price of goods etc. for the purpose of any goods to, at the time of clearance of goods, indicate in the documents relating to assessment, sales invoice and other like documents the amount of such duty which will form part of the price on which such goods are to be sold. Section 28D contains a presumption that incidence of duty has been passed onto the buyer, but this presumption is rebutable. In the absence of proof of such duty not having been passed on to the buyer, Section 28D provides that the passing of such duty by the seller to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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