TMI Blog2019 (12) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) of Section 18, since has application only from 13.07.2006 and as per the various decision of the High Courts as has been relied upon by him, it would not have any retrospective effect, the said provision shall not be made applicable to the case of the importer / appellant herein, since admittedly all the three applications of the importer / appellant seeking refund were made well prior to 13.07.2006. From the reading of the aforesaid Section 18(2) and (5) of the Act as well as the decision of the Scientific Instruments case ( supra ) of a Coordinate Bench of this Court, we are of the considered view that, the importer has to necessarily satisfy the unjust enrichment test before the original authority not withstanding the fact that, he has made the claim for refund in all the three cases before 13.07.2006 - Since the final assessment was not over and before which based on the provisional assessment under Section 18(1) since duty had been paid by the importer, of course under protest and thereafter consequent upon the eligibility of the importer after the Judgment of the Hon'ble Apex Court in their own case in Tata Teleservices Ltd., v. Commissioner of Customs reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afatlal (Supra) and Allied Photographics (Supra) ? (ii) Whether the Hon'ble Tribunal failed to appreciate that the Appellant had sought refund prior to 13.07.2006 and therefore, the provisions of Section 18(5) of the Act post amendment cannot be made applicable to the Appellant in light of the judgment of the Hon'ble Supreme Court in CCE v. TVS Suzuki 2003 (156) ELT 161 (SC) and CCE v. Allied Photographics India Ltd., 2004 (166) ELT 3 (SC)? (iii) Whether the Hon'ble Tribunal erred in uploading the remand in view of the decisions of the Hon'ble Supreme Court in ITC Ltd., v. CCE 2002 (140) E.L.T.4 (SC) and the Hon'ble Rajasthan High Court in Sulzer Processors v. CCE 2010 (254) ELT 559 (Raj.)? 3. After notice to the respondent, counsel entered appearance and since all these appeals arising out of the common impugned order as referred to above, these appeals are disposed of by this common order. 4. The brief facts which are required to be noticed for the disposal of these appeals are as follows : (i) That the importer, M/s.Tata Teleservices Ltd., who is the appellant in all these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted by the Appellant for the period March 2005 (C.M.A.No.2525/2018) 3. 16.02.2006 Refund application submitted by the Appellant for the period from November 2004 to December 2004 (C.M.A.No.2512/2018) (iv) The adjudicating authority, in the order-in-original allowed the refund claimed by the importer / appellant for the period between November 2002 and August 2003, except in respect of one Bill of Entry, dated 22.11.2002, which was rejected as time barred. As against the said order, the Revenue preferred an appeal to Commissioner (Appeals) in Appeal No.1/2010. Like that, for the period between November 2004 and December 2004, the adjudicating authority, in order-in-original has allowed the refund application of the importer / appellant in respect of 123 Bills of Entry. Against the said order, the Revenue filed Appeal before the Commissioner (Appeals) in Appeal No.2/2010. For the third period, i.e., for March 2005, the refund application filed by the importer / appellant, dated 11.02.2006 with regard to 28 Bills of Entry since had been rejected by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any retrospective effect and if at all under Section 18(5) original authority has to act upon to examine the aspect of unjust enrichment, that shall be done only in the cases where applications are made subsequent to the said sub-section came into effect, i.e., after 13.07.2006 and not prior to that. 7. In support of his contention, the learned counsel has relied upon the following decisions : (i) Commissioner of Customs v. Hindalco Industries Ltd., 2008 (231) E.L.T.36 (Guj.) (ii) Commissioner of Customs v. Indian Oil Corporation, 2012 (282) E.L.T. 368 (Del.) (iii) Mangalore Refinery Petrochemicals Ltd., v. C.C., Mangalore, 2015 (323) E.L.T.484 (Kar.) 8. By relying upon these decisions, the learned counsel would expand his submission by saying that, the relevant sub-section in Section 18 had been introduced with effect only from 13.07.2006, therefore, before which, the refund is automatic, as without even making an application, that could be possible. Once an application is made for getting the refund of the duty paid under protest by the importer / appellant, merely because the Revenue took tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant the job of evaluating the unjust enrichment in view of the law having been declared by this Court in Scientific Instruments Co., Ltd., case ( cited supra ). By further elaborating his contention, the learned Standing counsel would also contend that, in Scientific Instruments Co., Ltd., ( supra ), a Division Bench of this Court, following the dictum made by the Hon'ble Supreme Court in Mafatlal Industries Ltd., v. Union of India , reported in (1997) 5 SCC 536 has held that, when it is a provisional assessment followed by finalization of assessment under Section 27 of the Act, any refund question arising thereon must be subject to proof of not passing on the burden of duty to others. Therefore unless the assessee establishes that, he has not passed the burden of duty to another, he would not be entitled to refund as pointed out by decision in the case of Mafatlal ( supra ). By holding so, since the Division Bench, in Scientific Instruments has taken a clear view that, the test of unjust enrichment is not antithesis prior to 13.07.2006 has to be borne in mind and that is the reason why, the Tribunal, i.e., CESTAT has followed the dictum in Scientific Instruments and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importer is able to prove that, he has not passed on the incidence of such duty and interest, if any paid, to any other person, he would not be entitled to claim refund. 15. In this context, it is the case of the importer / appellant as vehemently contended by the learned counsel appearing for the importer / appellant that, the said sub-section (5) of Section 18, since has application only from 13.07.2006 and as per the various decision of the High Courts as has been relied upon by him, it would not have any retrospective effect, the said provision shall not be made applicable to the case of the importer / appellant herein, since admittedly all the three applications of the importer / appellant seeking refund were made well prior to 13.07.2006. 16. May be true that, these applications were prior to 13.07.2006 and the decisions of some of the High Courts referred to above also supports the case of the importer / appellant on this aspect. 17. We have given our anxious consideration on the point as to whether sub-section (5) of Section 18 would have only the prospective effect from 13.07.2006 and if so thereby any applications mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty paid already is in excess, then only the refund issue would come. Sub-section (5) makes it clear that, what is the amount of duty refundable under sub-section (2) has to be refunded in the manner provided under the said sub-section (5). Therefore the eligibility clause for getting refund of the excess duty paid already emanates from sub-section (2), where it makes clear that, once the assessment is finally made or re-assessed, then only, whether he is entitled to refund or not to be decided. Once his eligibility to refund is decided, the same is subject to the unjust enrichment test, in view of the words employed in clause (a) of sub-section (5), i.e., if he had not passed on the incidence of such duty and interest, if any paid on such duty, to any other person . 21. Only in this context, we look at the Scientific Instruments case, where a Coordinate Bench of this Court has taken the view, which is extracted hereunder for ready reference : 6. The question that falls for consideration is as to whether the respondent / importer is automatically entitled to refund claim solely on the ground that provision for unjust enrich ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) observed the nature and the character of refund claims under the Central Excises and Salt Act and the Customs Act as under : Nature and character of refund claims under the Central Excises and Salt Act and the Customs Act 105. It would be evident from the above discussion that the claims for refund under the said two enactments constitute an independent regimen. Every decision favourable to an assessee / manufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, whether before or after the 1991 Amendment - as interpreted by us herein - make every refund claim subject to proof of not passing on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 - and this Court while acting under Article 32 - would insist upon the said condition being satisfied before ordering refund. Unless the claimant for refund establishes that he has not passed on the burden of duty to another, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that provisional assessment was followed by a finalisation of assessment being finalised, under Section 27 of the Customs Act - any refund question arising thereon must be subject to proof of not passing on the burden of duty to others. Thus, in the absence of equity, i.e., unless the assessee establishes that he has not passed on the burden of duty to another, he would not be entitled to refund as pointed out by the decision in the case of Mafatlal Industries Ltd., (supra). Even in equity, the assessee is bound to substantiate its claim by showing bona fide that the payment of duty and claim not backed by unjust enrichment and the duty has not passed on to the customer, but it was borne out by the assessee only. 11. In the light of the principles stated above, we allow the appeal, thereby, we set aside the order. However on the observation made herein, the Assessing Officer shall consider the aspect of unjust enrichment. Thus, in fitness of things and in the interest of justice, the matter is restored to the Assessing Officer so as to enable to adjudicate the question of unjust enrichment. It is for the assessee to substantiate that the duty paid by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating authority who must come to a conclusion that, there has been no unjust enrichment on the part of the importer and then only he must allow the refund claim of the importer even though the importer already entitled to make such a claim statutorily. 27. If these principles are applied, even though the decisions, referred to by the importer / appellant, of various other High Courts, have given a different interpretation, however, we are in respectful agreement with the Co-ordinate Bench of this Court in Scientific Instruments Co., Ltd., case ( cited supra ), as the same was made following the dictum of the Hon'ble Apex Court in Mafatlal case (cited supra) of the Hon'ble Apex Court. 28. Though it was brought to the notice of this Court by the learned counsel appearing for the importer / appellant that, the Scientific Instruments Co., Ltd., ( supra ) has been appealed to the Hon'ble Supreme Court, where the leave was granted and the Civil Appeal is pending in Special Leave to Appeal (C).Nos.3674 of 2019, the learned counsel appearing for the importer / appellant has fairly submitted that, there has been no stay of the operation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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