TMI Blog2019 (9) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors certifies that the incidence of duty has not been passed to the customers, in that case, it can safely be presumed that since the duty burden has not been passed on to the customers and therefore, the question of unjust enrichment does not arise. Thus, the element of unjust enrichment are not present in the matter at hand. Fulfillment of requirement as prescribed u/s Section 28C and 28D of Customs Act, 1962 - HELD THAT:- The provision of Section 28C and 28D of Customs Act are presumptive provisions and once the importer assesse submits his claim that he has submitted the required sales invoices etc. it is on the part of the Department to establish that assessee has not passed the burden of enhanced duty on the customers. In this case we find that all the invoices, purchase and sales invoices have been submitted to the Department and Deputy Commissioner in his report dated 19 February 2018 has reported that burden of enhanced duty has been borne by the appellant and there is no element of unjust enrichment. Thus, the appellant has fulfilled this responsibility as cast by Section 28C and 28D of Customs Act, 1962 and Department has failed to establish any element of unju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot admissible to them. The Hon ble Apex court vide its judgement dated 26.03.2015 in the matter of M/s SRF Ltd. vs Commissioner of Customs, Chennai reported in 2015 (318) ELT 607 (SC) has held while interpreting a similar notification No. 06/2002-CE dated 01.03.2002 that the reduced rate of excise duty will be applicable to CVD even in respect of imported goods for the reason that no question of availing Cenvat Credit under the Cenvat Credit Rules, 2004 arise where inputs are procured from a country other than India. Thus, the condition must be considered to have been fulfilled. Consequent upon the judgement, the appellant filed above mentioned refund claims for the periods October, 2014 to 25 March, 2015 amounting to ₹ 24,69,98,215/- and April, 2015 to 17 July, 2015 amounting to ₹ 23,62,85,014/- vide their applications dated 29.09.2015 and for ₹ 1,56,24,904/- in case of M/s. Akshar Telecom (appellant No. 1) vide applications dated 27.09.2015 filed on 29.09.2015. A show cause notice dated 26.12.2015 was issued to the appellants proposing to reject the refund claims on the following grounds: (i) that firstly, the refund claims were not filed with c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 submitted that it appeared that the duty incidence had not been passed on to the buyers. In his another report dated 23.03.2018, the same Deputy Commissioner reported that they are not in a position to ascertain whether customs CVD was included in their sales invoices or not. The appellants were granted personal hearing on 11.04.2018 by the Commissioner (Appeals) who apart from arguing the case of unjust enrichment on the basis of documents produced by them and relevant case laws, further argued that as the adjudication order did not consider the issue of unjust enrichment, the same was beyond the scope of jurisdiction of the appellate authority. The Commissioner (Appeals) vide his Order-in-Appeal dated 26.07.2018 held as under: (i) The refund application filed by the appellant was proper and within the limitation period. Rejection of refund claim on the grounds that incomplete application was submitted by appellant is not sustainable; (ii) Department s denial of refund on the grounds that benefit of exemption notification No. 12/2012 is not available to appellants as intention of government while restricting the duty structure of mobile hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase laws to emphasize that the evidence produced were sufficient to hold that the incidence of duty was not passed on to the buyers. 5. The learned advocate has further argued that a refund of ₹ 28,48,587/- has already been sanctioned to them by the Deputy Commissioner (in the case of M/s. Trust Marketing) in a similar case and on the same issue and the present case is pari materia to the refund sanctioned by the Deputy Commissioner vide his Order no. 322/2016 issued from F. No. VIII (E)/20/refund /ACC/156/2016 dated 18 April, 2017 wherein it has been held on the question of unjust enrichment that I find that the appellants contention that burden cast upon them to prove that incidence of duty was not passed on to the customers was discharged by the fact that the amount of excess tax paid, have been shown as receivable (recoverable) in their financial statement of financial year 2015-2016, this fact indicates that excess duty paid was not added to the cost of final product. Accordingly, I hold that provisions of unjust enrichment clause under section 28 of Customs Act, 1962 was not applicable to the facts of this case, hence, not invokable. As per the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to rule out unjust enrichment to the importer / claimant is fulfilled in respect of all goods imported and sold. 9. It has further been pleaded that the Chartered Accountants certificate certified that the price at which the imported goods sold by the appellants to the buyers was not increased on increase in the rate of CVD. The learned advocate has pointed out that in the case of Intex Technologies (India) Ltd. vs. Union of India (Writ Petition (C) No. 10618 of 2016) has held that the refund claim is to be accepted and passed if the Chartered Accountant s certificate claiming that burden has not been passed on to the customers. The learned advocate has also stated that in the case of Vishal Video Appliances Pvt. Ltd. vs. Union of India reported in 2016 (341) ELT 39 (Del), the Hon ble Delhi High Court noted that the fact that appellant has produced Chartered Accountant s certificate evidencing the assessee s claim is not hit by unjust enrichment, the Hon ble Court has allowed the refund claim on the basis of Chartered Accountant s certificate filed by the appellant. 10. Similarly the learned advocate has taken the shelter of judgement of De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat CVD has not been passed on to the customers during the period 2014-2016. The learned advocate has taken the support from following judicial pronouncements to establish that if the refund amount is shown as recoverable in the balance sheet, the doctrine of unjust enrichment is not applicable. a. Bajaj Auto Ltd. vs. CC [2017 (347) ELT 519(T)]; b. CC vs S Mathivathani Traders [2016(344)ELT 329 (T)]; c. Cargill Foods India Ltd. vs CCE [2010(262)ELT 691 Tri-Mum)]; d. CCE vs Shrinathji DYG [2010 (262 ) ELT 622 (Tri-Ahmd)]; e. Global Ventures vs. CCE, [2010 (261) ELT 1164 (Tri-Chen)] f. CCE vs Paradeep Phosphates Ltd.[2009(238) ELT 690 (Tri-Kol) 13. To further substantiate the claim that sale prices of mobile phones are not linked to the CVD, the learned advocate has tried to prove by showing the price pattern which was existing before the CVD was increased from 6% to 12% saying that selling price of the goods have not been changed after the rate of CVD was increased from 6% to 12% since 01st March, 2015. The following table have been referred by the learned advocate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. Ex., Bhubaneswar, [2000 (125) E.L.T. 943 (Tribunal)] maintained by Hon ble Supreme Court in [2001 (127) E.L.T. A162 (SC)] ii. Ashish Metal Rolling Mills vs. Commr. of Ex. Ahmedabad-I, [2014 (305) E.L.T. 510 (Guj)] iii. Commissioner of Central Excise, Coimbatore vs. EL. P. EM Industries, [2017 (356) E.L.T. 565 (Mad)] iv. Yu Televentures Pvt. Ltd. v. Union of India, [(358) ELT 81 (Del)] v. Vishal Video Appliances P. Ltd. v. UOI [2016 (341) ELT 39 Del)] vi. Commissioner of C.Ex. Cus. V. Manisha Pharmoplast Pvt. Ltd., [2008 (222) E.L.T. 511 (Guj)] 15. It has further been argued by the learned advocate that Department has not provided any evidence to prove that the duty has been passed on to the customers in the present case and the Commissioner (Appeals) has not considered the Chartered Accountant s certificate without giving any cogent reasons as why same is not being considered inspite of the fact that Chartered Accountant s certificate has been issued by reputed Chartered Accountant s firm after referring to the appellants financial books of accounts as well as sales invoices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that they have not passed on the burden of CVD to the consumers on the above mentioned three criterion laid down by this Tribunal in the case of Maruti Udyog Ltd. (supra). It is a matter of record that appellants balance sheet for the financial year 2015-2016 captioned the amount of ₹ 48,61,31,816/- under heading loans and advances on assets side. Further, as mentioned by the learned advocate, the schedule 15 of the balance sheet of the appellant specifically provides that the refund amount is attributable to customs CVD refundable . The schedule 17 of the balance sheet also mentions that Chartered Accountant has certified that the assessee has shown the amount of ₹ 48,61,31,816/- as advance payment in the assets side of the balance sheet under Loans and advances . Considering the fact that the appellants have shown the amount of refund as recoverable in their balance sheet certainly proves that appellant have not passed on the burden of CVD duty to their customers. This Tribunal in its decision in Dabur India vs. Commissioner of Customs, Ghaziabad reported under 2008 (228) ELT 131 (Tri-Delhi) has held as follows: 5. We find that in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of refund sought was shown as receivables, appellant has been able to prove that he has not recovered the same their customer, we hold that the impugned order is unsustainable and liable to be set aside. The impugned order is set aside and appeal is allowed with consequential relief. 21. The learned Commissioner (Appeals) has not accept the claim of the appellant showing the refund as receivable/ recoverable under the assets column of the balance sheet for financial year 2015-2016, saying that the appellant has included the disputed amount of ₹ 66,67,22,665/- in the debit side of the trading account of the financial year 2014-2015, and the appellant deliberately credited a schedule in the balance of financial year 2015-2016 under heading ANNEXURE to the Notes on accounts just to hood winch the Department. 22. We have analyzed the contentions in this regard and find that as per Standard Accounting Principals, (which learned Commissioner (Appeals) did not have a look at) the contingent assets are to be reflected in the financial year in which such assets actual arise. 23. The relevant extract of the Financial Account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtered Accountant certificates from a reputed chartered accountant firm M/s. Kotwani and Company which are dated 28.9.2015 and same has been submitted for both the appellants and specifically covers the specific refund claims. The relevant extract of the Chartered Accountant certificate is reproduced below: D. That for the purpose of examining the clause of unust enrichment to the importer in respect of subject refund claim, we have verified the importer s Books of Accounts and other relevant documents and records of the goods. Based on such verification, we have satisfied ourtselves: a) that the price at which the imported goods were sold to the buyers has not increased due to increase in the rate of CVD in 2014-2015. b) That customs duty has not been recovered from the customers separately in any manner. In our view as a business practice any variation / increase in tax burden has been taken as a hit against the profit margin of the Company and same is evident from the cost sheets examined. Accordingly, we certify that the claimant has not passed on the incidence of the differential customs duty to the buyer or any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the claim in respect of June and July, 2015. Pertinently, respondent No. 4 observes in respect of those invoices as under : I find that the sales invoices of June, 2015 and July, 2015 produced by the importer do not reflect the CVD amount separately which, prima facie, indicate that the burden of SAD has not been passed on by the importer to their customers directly. Further, I have already taken note of the fact that the importer has submitted a Chartered Accountant's Certificate issued by M/s. Nayyar Maniar Associates LLP, M. No. 502101, to the effect that certifying that the burden of CVD under this refund claim has not been passed on to the buyers and the refund being claimed is shown in their books of account/balance sheet for the year ended 31 March, 2016 as amount recoverable from the Customs. Accordingly, I hold that the provisions of unjust enrichment clause under Section 28D read with Section 27 of the Customs Act, 1962 are not applicable to the facts of this case and hence not invocable. 27. By the same yardstick, there was no reason whatsoever for respondent No. 4 not to accept the very same documents in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l records, import prices and sale invoices that there is no element of unjust enrichment and the Department has not adduced any evidence to contradict such findings of the Deputy Commissioner and the Chartered Accountant, we are inclined to accept these fact finding reports as correct. 30. In this regard the Hon ble High Court of Delhi in its judgment in case of M/s Hero Motorcorp Ltd. versus Commissioner of Customs (Import and General) reported in 2014 (302) E.L.T. 501 (Del.) has held under para 17 of the judgment that when the assessee is able to show that the burden of duty has not been passed on he asserts and submits affidavits and certificate of Chartered Accountant alongwith copy of the balance sheet, indicates and shows sale invoices for pre and post period and when there is no other negative factor or evidence to the contrary to disbelieve, the contention should be accepted . 31. In view of above, we feel that the Chartered Accountants certificates are acceptable and since no evidence has been adduced by the Department to contradict the same, we are inclined to accept the same as indication the facts that burden of enhanced duty has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct at previous RSP of ₹ 1000/-, we understand that the burden of enhanced rate of tax has been absorbed by the manufacturer and the burden of increase in the tax component of product has not been passed down to the customer, we find a similar situation in this case. 37. In view of the above, we are of opinion that the comparative analysis of prices, in a situation of change in the tax rates, is absolutely important to decide whether the additional tax burden in situation of increase in tax rates is being shifted to the buyer or not. This also has to be the important parameter to determine whether in a given situation whether there is a presence of unjust enrichment or not. We find that in the case at hand, the prices (both dealer price and RSP) indicate that the burden of enhanced rate of CVD has not been shifted to the buyers and, therefore, there cannot be any element of unjust enrichment. 38. While holding the above view, we also take shelter of judgement of Hon ble Supreme Court in the case of Commissioner of Customs New Delhi vs. Organan (India) Ltd. reported under [2008 (231) ELT 201 (SC)], wherein the Hon ble Apex Court has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs duty to its customers. This finding is a finding of fact based on evidence which does not call for any interference. 39. Similarly, this Tribunal in the case of Indian Metals Ferro Alloys vs. CCE, Bhubaneswar reported under [2001 (125)ELT 943 (Tri)] has held that invoices are normally the best evidence to show whether or not the burden of duty has been passed on by the manufacturers to his customers and if the invoices does not show any element of duty being recovered from the customers, in that case, it can safely be concluded that there is no element of unjust enrichment. The relevant extract of the decision in the case of M/s. Indian Metals and Ferro Alloys (supra) is reproduced hereinbelow: 4.2 As regards the question of unjust enrichment the findings of the authorities below in our view, are not tenable. Invoices are the normally the best evidence whether the burden of duty has been passed on or not by a manufacture to his customers. If the invoices do not show any element of duty having been recovered from the customers, it has to be assumed in the absence of any evidence to the contrary produced by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is context, reference may be made to, Commissioner of Central Excise, Kanpur v. Corona Cosmetics Chemicals (P) Ltd. - 2000 (118) E.L.T. 356 (T) and Commissioner of Central Excise v. Minerva Mills - 2002 (141) E.L.T. 177, wherein it has been so ruled by the Tribunal. The Revenue had not produced any evidence to contradict the documentary evidence produced by the appellants referred to above. Therefore, the unrebutted evidence of the appellants that their selling price of the final product was not influenced by payment of duty on the inputs during the period in question and that the price remained the same or even on certain occasions stood reduced, deserves to be accepted. From all this evidence brought on record, it stands amply proved that the incidence of duty had not been passed on by the appellants to the buyers/consumers during the period in question . 42. We find that learned Commissioner (Appeals) has wrongly applied the judgement of Hon ble Supreme Court in the case of Commissioner versus M/s Allied Photographics India Ltd. reported under [2004 (166) ELT 3 (SC) for supporting his findings while, the Supreme Court in case of Commissioner of Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l placed on record by M/s. AGIL as to how it had accounted for the cost of purchase in its books and the accounting treatment it gave to the said item at the time of payment of the purchase price. No record as to costing of that item has been produced. This material was relevant as in the present case NIIL conceded that it had passed on the burden of duty to its distributor M/s. AGIL (buyer) and it was the buyer who claimed refund. It has been urged on behalf of the respondent and which argument has been accepted by the authorities below that 20% of the total price paid by M/s. AGIL to NIIL represented total excess excise duty levied and not the excess duty collected by NIIL in the form of sale price from its distributor M/s. NIIL. It was argued that excess duty collected by NIIL represented only 1.62% of the total price. It was argued that resale price charged by M/s. AGIL to its dealers had no relevance to excess excise duty paid by M/s. AGIL to NIIL at the time of purchase as the sale price charged by M/s. AGIL to its dealers was based on the prevailing market price. We do not find any merit in this argument. In the present case, the refund claim is made by a buyer and not by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been examined by the authorities below, we do not find merit in the contention of the respondent that this Court should not interfere under Article 136 of the Constitution in view of the concurrent finding of fact. (Emphasis supplied) 15. The Supreme Court noticed that the assessee at the earlier proceedings had conceded before the High Court that it had passed on the duty burden to its distributor and the only question was whether the distributer had passed on the duty burden to the dealers. It was therefore observed that it was highly improbable that the distributor had borne the duty burden or element of 20% which was already included in the purchase price of the distributor. The period in question was a decade long between 1974 to 1984. It was therefore, highly improbable that the distributor would have paid and borne the entire duty burden for the said period. It was further observed that no material was placed on record which supported the said improbability of the duty burden not being passed on to third parties. The distributors had failed to produce their account books. The assessee had also taken a plea that the actual excess duty rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser of the finished product can be no ground for interpreting Section 27 differently. It is not possible that in no case will an importer not be able to prove that the incidence of the duty imposed on the imported raw material has not been passed on to any other person. In fact in Civil Appeal No. 4381 of 1999 filed by the Commissioner of Customs against M/s. Surya Roshini Limited, the importer had produced certificate from the Chartered Accountants giving details of costing of the final product and the Commissioner (Appeals) found as a fact that the component of excess customs duty paid on the imported raw material had not gone into the costing of the finished product. Without going into the correctness of this finding 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 anybody else. 17. While examining the question whether or not burden of duty has been discharged by the assessee, one has to be practical and adopt a realistic approach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) The Commissioner (Appeals) can t question the authenticity of sale invoiced by asking the appellants to substantiate the price quotation for the period prior to and after the sale. (c) It was for the Department to have brought on record evidence to prove the case of unjust enrichment burden passed on. The sale price and costing of the goods as submitted by the appellant that has not been questioned by both the authorities below. Therefore non-filing of IT returns and of Balancesheet to the Commissioner (Appeals) are issued not germane and are irrelevant for considering the question of unjust enrichment the sale of imported goods been made by the importer. The cost of goods is a pure question of fact and profit and loss are to be determined consequently to the cost of the goods of import duties, especially on enhanced value would be a important component of costs. (d) Since the presumption raised by Sec. 28D of the Customs Act, 1962 is a rebuttable presumption of law and not conclusive merely because the documents of sale are not as per the provision of Section 28 DR it can t be presumed that whatever the appellants has recovered from his customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same Chartered Accountant, to allow another refund of the claimant, there was no valid reason to deny the claim of same assessee in another case. The relevant extract of the above decision is reproduced below: 24. It has been explained by learned counsel for the petitioner that no refund claim had yet been made in respect of the aforementioned B/Es during the financial year which ended on 31st March, 2015. Since the refund applications were submitted only during FY 2015-16, the outstanding refund in respect of these four B/Es could not have been shown in the balance sheet for FY 2014-15. Indeed, the mere fact that this amount was not shown as outstanding during the year 2014-15 would not mean that the petitioner is not entitled to claim refund. The petitioner cannot possibly be denied refund if it, in fact, did not pass on the burden of CVD to its customers. 25. What respondent No. 4 had to examine was whether the claim of the petitioner that it had not passed on the incidence of CVD in respect of the above B/Es for 27th March, 2015 to 31st March, 2015 to the customer was supported by proper documentation. 26. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The relevant extract of the decision are reproduced here below :- 13. Further, I find that in the case of Intex Technologies (India) Ltd., in writ petition No. 10618/2016, Hon ble High Court of Delhi by order dated 08.11.2016 (unreported), was again considering identical issue and one of the point which came before their Lordships is regarding refund claim in light of the decision of the Apex Court. Their Lordships in paragraph No. 6 of the order held as under: 6. In the light of the law laid down by the Supreme Court in SRF Ltd., (supra) the Court is of the opinion that the claim in these proceedings has to succeed. A direction is issued to the respondents to process the petitioner s refund claim and pass appropriate orders having regard to the fact the petitioner had filed supporting certificates in the form of a Chartered Accountant s clarification/certificate etc. claiming that the benefit sought was not passed on to the customers. The respondents are further directed to pay the appropriate refund amount together with interest applicable till date of actual payment within three weeks from today. The said order of the Hon ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yar Maniar Associates LLP, M. No. 502101, to the effect that certifying that the burden of CVD under this refund claim has not been passed on to the buyers and the refund being claimed is shown in their books of account/balance sheet for the year ended 31 March, 2016 as amount recoverable from the Customs. Accordingly, I hold that the provisions of unjust enrichment clause under Section 28D read with Section 27 of the Customs Act, 1962 are not applicable to the facts of this case and hence not invocable. 27. By the same yardstick, there was no reason whatsoever for respondent No. 4 not to accept the very same documents in respect of the imports between 27th March, 2015 and 31st March, 2015. The certificate of the CA is categorical that the incidence of CVD, even in respect of these imports, had not been passed on to the customers. Consequently, there was no valid justification for respondent No. 4 to have denied the refund claim. 15. It is noticed that identical/similar issue came up before the Hon ble High Court of Karnataka in writ petition No. 45551- 45554/2016, which was disposed of the writ petition directing Revenue Authorities to sanction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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