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TMI Blog2019 (12) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal 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 appeals, imported consignments of fixed wireless telephones during various periods from November 2002 to March 2005 vide various Bills of Entry. At the time of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 original authority, the importer preferred Appeal before the Commissioner (Appeals) in Appeal No.3/2010. (v) That is how Appeal Nos.1/2010, 2/2010 and 3/2010 came before the Commissioner (Appeals), out of which, the first two appeals were preferred by the Revenue and the third appeal was preferred by the importer and all those appeals were decided on 04.01.2010, of course by different orders by the Commissioner (Appeals), whereby all the three appeals were ordered, by which, the issue was remanded back to the original authority to examine the issue of unjust enrichment and accordingly, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 time to finalise it, it cannot be construed that, it could be saved not withstanding the applicability or enforcement date of Section 18(5) of the Act. 9. The learned counsel would also contend that, the CESTAT only relying upon the decision of this Court in Commissioner of Customs (Export), Chennai v. Scientific Instruments Company Ltd., reported in 2014 307 ELT (Mad), has concluded the issue stating that, though there has been a different view taken by the Gujarat High Court in Hindalco Industries Ltd., (supra) that, Section 18 of the Customs Act amended from 13.07.2006 making unjust enrichment applicable to refund claims arising out of the finalization of provisional assessment does not have retrospective effect, by way of j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 confirmed the order of Commissioner (Appeals), who remanded the issue of unjust enrichment to be evaluated by the original authority. Therefore the learned counsel would contend that, there has been absolutely no reason to interfere with the order impugned of the CESTAT and hence these appeals are deserved to be rejected. 12. We have heard the rival contentions raised by the learned respective counsels appearing for the parties and we have given our anxious consideration to the said arguments as well as the materials placed before us for perusal. 13. The controversy revolves in these appeals, in our considered opinion, is in very narrow compass. In order to dwell into the same, for a easy reference, the relevant provision of the Act, namely Section 18(5) is extracted hereunder : "18. (1)... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (5) of Section 18 would have only the prospective effect from 13.07.2006 and if so thereby any applications made claiming refund prior to the said date would not be treated in applying the principles underlined under the said sub-section (5) of Section (18), namely unjust enrichment principle and if that is so, as to whether the importer / appellant is entitled to get the refund automatically, without having reference to the unjust enrichment procedure as contemplated under Section 18(5) and in that case, whether the order of remand passed by the Commissioner (Appeals) as has been confirmed by the CESTAT in the impugned orders are sustainable or not. 18. The said question, apart from the angle, as has been adopted by the Coordinate Bench of this Court in Scientific Instruments case (cited supra), can also be looked into from a different angle. In this process, we would take the endeavour to go into the import of sub-section (2) to Section 18, which reads thus : "(2) When the duty leviable on such goods is assessed finally (or re-assessed by the proper officer) in accordance with the provisions of this Act, then - (a) in the case of goods cleared for home consumption or ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 18 of the Customs Act, 1962 with effect from 14(13)-7- 2006 and in the instant case, the provisional assessment having been finalised prior to the date of insertion of the said provision. 7. The Hon'ble Supreme Court in the case of Mafatlal Industries Ltd., and Others v. Union of India and Others reported in (1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (SC) considered the question relating to refund claim under Central Excise and Customs Act and held as under : "104. Rule 9B provides for provisional assessment is situations specified in clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that "when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be." Any recoveries or refunds consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onally valid as explained by us herein before. They have to be applied and followed implicitly wherever they are applicable." 8. Therefore, in the case of provisional assessments made and thereafterwards, it results in a refund, even in the absence of a provision of refund, if an assessee has to claim as refund, under equity, he must prove that there is no unjust enrichment and that the liability had not been passed on to the customer. That being the case, refund is not automatic one merely on the score of provisional assessment being followed by final assessment and unless and until the assessee substantiates the claim backed by the proof that the liability has not been passed on to the customer, such a refund claim may be termed as unjust and the claim cannot be granted as a mere consequence for refund arising on final assessment. 9. Learned counsel appearing for the importer / assessee submitted that having regard to the above said observation of the Apex Court in the case of Mafatlal Industries Ltd., (supra) the observation by the Tribunal in paragraph 6.2 has to be set aside. The Tribunal pointed out that the order of the Tribunal dated 9-7-2007, the provisional assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Instruments case (supra), has held so, after following the dictum of the Hon'ble Supreme Court in Mafatlal Industries case (supra). 23. 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. 24. 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 2006 (194) ELT 11 (SC) (cited supra), the importer made those applications. 25. Merely because those applications for claim of refund were made prior to 13.07.2006, it cannot be said that, the import of sub-section (5) of Section 18 has become redundant especially in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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