TMI Blog2024 (3) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... bear the increase in duty burden and as submitted by the appellant s Chartered Accountant certificate dated 15.3.2012 had only stated that the additional duty along with interest and penalty paid had resulted in erosion of profit/increase in the loss. Alternative plea of the appellant that unjust enrichment is not applicable to State Undertakings as has been held in the case of CCE, Bangalore vs. Karnataka State Agro Corn Products Limited [ 2006 (7) TMI 11 - HIGH COURT OF KARNATAKA (BANGALORE)] . Thus, we do not find any merit in the impugned orders to deny the refund on the ground of unjust enrichment. For the reasons discussed above, the impugned orders are set aside and allow the appeals with consequential relief, if any, as per law. - HON'BLE DR. D. M. MISRA , MEMBER ( JUDICIAL ) And HON'BLE MRS. R. BHAGYA DEVI , MEMBER ( TECHNICAL ) For the Appellant : Mr. B. V. Kumar , Advocate For the Respondent : Mr. K. A. Jathin and Mr. K. Vishwanath ( ARs ) ORDER Per : R. BHAGYA DEVI These appeals are filed by the appellant M/s. ITI Ltd. Bangalore against the impugned Order-in-Appeal No.186/2012-Cus. (B) dated 13.12.2012 and Order-in-Appeal No. 06/2013 dated 28.02.2013 passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive the total composite price inclusive of levies and taxes that is sales tax and excise, packing, forwarding freight and insurance etc; but excluding octroi/entry tax which will be paid extra as per actual wherever applicable . At Para 9.3, it is mentioned that the prices quoted by the bidder shall remain fixed during the entire period of contract and will not be subject to variation on any account. A Bid submitted with an adjustable price quotation will be treated as non-response and rejected and at Para 9.5, it says that any change in this shall have no effect on price during the scheduled period of delivery. At Para 10.2 of the Tender Document, it is stated that any increase in taxes and other statutory duties/levies after the expiry of the delivery date shall be to the contractor s account. But benefit of any decrease in these taxes/duties shall be passed on to the purchaser by the supplier. Based on these standard documents, the learned counsel submits that the purchase orders clearly indicate that once the price is quoted against the bid document and on that basis purchase orders are placed by Bharat Sanchar Nigam Ltd (BSNL) on the appellants, the appellants have no choice b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 2.11.2007 has observed as follows: In the facts and circumstances of this case we find that questionable methods have been adopted to split up the value of the equipment at 70% and 30% in order to escape from the customs duty. That is why, even the appellants did not want the show cause notice to be issued and also did not want even personal hearing before the educating authority adjudicating authority. Realising the improper method adopted by them much before the issue of the adjudication order even on 3.9.2004, they had written a letter to the commissioner for accepting the unit price without splitting up. It has also been brought out by the investigation that similar equipment were imported by reliance and Tata and they had paid duty on the entire value of the equipment and no split up was shown by them. In such circumstances we do not want to interfere with the Commissioner s order as regards the valuation of the impugned items. However, considering the fact that the appellants paid the duty even without the issue of show cause notice and also much before the adjudication order, we feel that the charging of interest and imposition of penalty are not justified, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Regarding the alternative plea of the appellant that unjust enrichment is not applicable to State Undertakings as has been held in the case of CCE, Bangalore vs. Karnataka State Agro Corn Products Limited (supra) wherein the Hon ble High Court observed as follows: 5. The Tribunal has noticed material facts and circumstances and thereafter rejected the reason of unjust enrichment in the case on hand. Tribunal was of the view that if refund is granted, it goes to the State s exchequer, and that the refund goes to the person who has borne it and hence there is no unjust enrichment at all. Let us see as to whether this finding is acceptable or not. 6. Unjust enrichment has been considered by courts of law. Leading case is Mafatlal Industries Limited v. Union of India and Others - 1997 (89) E.L.T. 247 (S.C.) = (1998) 111 STC 467. This is what the apex court has to say at page 547 reading as follows: The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged and in the absence of any contrary evidence, the question of not passing on the duty was not coming forth. On the contrary, in the instant case, no such evidence has been placed before us. 12. The Hon ble High Court of Karnataka at Bengaluru in the case Commr. of Cus, Mangalore Versus Hindustan Organic Chemicals Ltd. 2021 (377) E.L.T. 605 (Kar.) dated 11-2-2021 observed that: Admittedly, the claim for refund which was made by the assessee arises out of the order of provisional assessment for the period prior to 14-7-2006. The issue whether the public sector undertakings are outside the purview of unjust enrichment is concerned, the same is no more res integra and has already been adjudicated in Mafatlal Industries Limited v. Union of India, 1987 (89) E.L.T. 247 (S.C.), wherein the Supreme Court has held as under : The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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