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TMI Blog2024 (10) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Appeal No. 50202 of 2020 has been filed by the appellant to assail the order dated 26.09.2019 passed by the Commissioner of Customs (Appeals), New Delhi [the Commissioner (Appeals)]. This order also dismisses the appeal filed by the appellant to assail that part of the order dated 23.01.2017 passed by the Deputy Commissioner that directs that the claim of Rs. 2,33,05,108/- sanctioned on the refund application filed by the appellant would be credited to the Consumer Welfare Fund in terms of the provisions of section 27(2) of the Customs Act. 3. Cross-Objections had been filed by the department on 28.12.2022 in both the aforesaid appeals in terms of section 129A(4) of the Customs Act and with the Cross-Objections applications for condoning the delay of 977 days in filing the Cross-Objections were also filed. The grounds contained in the Cross-Objections mainly concentrate on the decision of the Supreme Court in Priya Blue Industries Ltd. vs. Commissioner of Customs (Preventive) [2004 (172) E.L.T. 145(S.C.)] wherein the Supreme Court held that so long as the order of assessment stands and has not been reviewed under section 28 of the Customs Act, duty would be payable as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant duly appeared before the CESTAT on 01 November 2021, 24 November 2021, 10 December 2021, 09 February 2022, 27 April 2022, 21 July 2022 and again on 03 October 2022. The cross-objections were themselves based on contentions which had been duly raised before the Deputy Commissioner itself. It is on an overall conspectus of the aforesaid, that the CESTAT has come to the conclusion that the delay caused was not liable to be condoned. 6. We find that the aforesaid view as taken cannot be said to suffer from any perversity. Consequently, and since no substantial question of law arises, the appeal fails and shall stand dismissed." (emphasis supplied) 7. It is after the rejection of the Cross-Objections that the two appeals have now come up for hearing. FACTS 8. The appellant imported mobile phones during the period November 2014 to February 2015 and paid additional duty of customs at the rate of 6% upto February 2015. A notification dated 17.03.2012 was issued by the government providing that the additional duty of customs would be leviable only at 1% under entry at serial 263A on import of mobile phones provided condition no. 16 was satisfied. Condition no. 16 provides tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to refund of Rs. 2,59,20,950/- out of which refund of Rs. 26,15,842/- is barred by time. Thus, in effect this appeal relates to refund of Rs. 2,33,05,108/-. 11. Two separate but similar orders, each dated 23.01.2017, were passed by the Deputy Commissioner on the refund applications filed by the appellant. In view of the decision of the Supreme Court in SRF Ltd., the Deputy Commissioner held that the appellant was required to pay additional duty of customs at the reduced rate of 1% in terms of condition no. 16 of the notification dated 17.03.2012. The Deputy Commissioner then examined whether it was necessary for the appellant to get re-assessment of the Bills of Entry for claiming refund and for this purpose examined the decision of the Delhi High Court in M/s. Micromax Informatics Ltd. vs. Union of India [2016 (335) E.L.T. 446 (Del.)] that had been placed by appellant to contend that it was not necessary to seek reassessment of the Bills of Entry. The Delhi High Court in Micromax Informatics had held that an authority would not be justified in refusing to entertain an application for refund only because no appeal was filed against the assessment order, even if ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is premise it was held that certificate given by a Chartered Accountant cannot be disbelieved and should be accepted as true and correct. Consequently, it was held that in view of the said certificate the appellants had succeeded in proving that the burden of incidence of duty has not been passed on to the buyers. However, in the present case the appellants was asked certain documents for rebuttal of any unjust enrichment by the original adjudicating authority, still the appellant's C.A. Certificate findings were not supported with the documents. In such circumstances, I find that all the above mentioned cases laws, relied upon by the claimant, are set upon a different sets of facts and hence cannot be applied to the present case. 5.4 In view of above, I find that, the impugned Order is legally correct as the applicant has failed to conclusively prove that the burden of incidence of duty has not been passed on to the buyers of the goods imported under the subject Bills of Entry. And accordingly, this refund claim is hit by the doctrine of unjust enrichment." (emphasis supplied) 14. It needs to be noted that the department did not file appeals before the Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorized representatives appearing for the department however, made the following submissions: (i) The refund claims filed by the appellant are not maintainable as they had been filed without getting the assessment orders modified and in support of this contention, learned authorized representatives placed reliance upon the decision of the Supreme Court in ITC; (ii) A pure question of law can be raised at any point of time and in support of this contention learned authorized representatives placed reliance on the following decisions: (a) M/s Shiv Naresh Sports Pvt. Ltd. vs. Commissioner, Service Tax, Commissionerate, Service Tax Delhi-III [2022(6) TMI-CESTAT New Delhi]; (b) Asstt. Commr., Income Tax, Rajkot vs. Saurashtra Kutch Stock Exchange Ltd.[2008(230) E.L.T. 385 (S.C.)] ; (c) Gannon Dunkerley & Co. Ltd. vs. Commr. Of Ex. & S.T. (ADJ), New Delhi [2020 (43) G.S.T.L. 183 (Tri.-Del.)]; (d) K. Lubna and Others vs. Beevi & others [(2020) 2 SCC 524]; (e) The National Textile Corporation Ltd. vs. Nareshkumar Badrikumar Jagad & others [2011 (12) SCC 695]; and (f) Saurav Jain & anr. vs. M/s A.B.P. Design & anr. [2021 (9) TMI 1112 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction raised by the learned authorized representatives appearing for the department that the refunds application are not maintainable in view of the decision of the Supreme Court in ITC needs to be examined first, because if this issue is decided in favor of the department then it will not be necessary to examine whether the incidence of duty was passed on by the appellant to the buyers. 20. The contention of the learned authorized representatives appearing for the department is that the issue as to whether the application filed for refund would be maintainable even in the absence of the assessment order having been modified has been settled by the Supreme Court in ITC and, therefore, despite the rejection of the Cross-Objections by the Tribunal, the department can still raise this legal issue while responding to the appeals filed by the appellant against that part of the orders that direct for deposit of the sanctioned amount in the Consumer Welfare Fund. 21. Learned counsel for the appellant, however, submitted that it is not open to the department to raise this issue regarding the maintainability of the refund applications in these appeals as the department had allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning claims of Rs. 3,43,88,087/- and Rs. 2,59,20,950/- were found to be within limitation. 28. Regarding the issue as to whether the incidence of duty had been passed on to the buyers or not, the Deputy Commissioner examined the certificate dated 29.12.2015 that had been issued by the chartered accountant and observed that they do not conclusively prove that the incidence of duty had not been passed on to the buyers. The finding recorded by the Deputy Commissioner is as follows: "42. ***** The aforementioned statutory requirements regarding unjust enrichment did not appear to be adequately compensated by the auditor's certificate dated 29.12.2015 issued by M/s. KRA & Co., Chartered Accountants, New Delhi and enclosed with the refund application. The auditor's certificate, at para II(D), draws a subjective conclusion on the point on the assumption that the incidence of duty burden has not been passed onto the final consumer as the price at which the imported goods were sold to buyers had not increased in 2014-15 due increase in rate of CVD in 2014-15 or before 2014-15. This assumption of the auditor cannot substitute cogent evidences to substantiate the absorption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Fund in terms of section 27(2) of the Customs Act. 30. Feeling aggrieved by that part of the order of the Deputy Commissioner which directed that the sanctioned amount of refund should be credited to the Consumer Welfare Fund, the appellant filed two appeals before the Commissioner (Appeals). 31. The department, however, did not file any appeal before the Commissioner (Appeals), though under section 128(1) of the Customs Act, any person aggrieved by any decision or order passed under the Customs Act by an officer of customs lower in rank than a Principal Commissioner or Commissioner of Customs can appeal to the Commissioner (Appeals). The department should have considered itself to be a person aggrieved because the order passed by the Deputy Commissioner sanctioned the refund claim as a result of which the department would have to pay that much amount. It cannot be urged by the department that merely because the amount was directed to be credited to the Consumer Welfare Fund in terms of the provisions of section 27(2) of the Customs Act, the department would not be a person aggrieved and it would be a person aggrieved only when the amount is sanctioned in favour of an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the Tribunal was justified in not permitting the department to raise the issue for the first time before the Tribunal. 37. A similar issue was examined by a Division Bench of the Allahabad High Court consisting of the Chief Justice (now the Chief Justice of India) and one of us in Indian Farmers Fertilizers. Two questions of law were raised in the appeal and they are as follows: "I. Whether the Hon'ble CESTAT has erred in allowing the refund, without considering provisions of limitation provided in Section 11B of the Central Excise Act, 1944? II. Whether the Hon'ble CESTAT has erred in allowing the refund, without considering provisions of unjust enrichment provided in Section 11B of the Central Excise Act, 1944?" 38. In respect of the first issue as to whether the refund claim could have been allowed without considering the issue of limitation, the Allahabad High Court followed the decision of the Supreme Court in Toyo Engineering and held that though the department had filed an appeal against the order of the Assistant Commissioner sanctioning the refund, but this ground was not taken by the department in the appeal. The appeal filed by the department wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the revenue. Hence, the record would indicate that the finding of the adjudicating authority to the effect that the claim was within the limitation was not challenged by the revenue in the first appeal which was filed before the Commissioner (Appeals). That being the position, it would not be open to the revenue to now assert to the contrary and to urge a point which was not raised in the grounds of appeal filed by the revenue while assailing the order of the adjudicating authority sanctioning the refund. 8. In Commissioner of Customs, Mumbai vs. Toyo Engineering India Limited (2006 (201) E.L.T. 513 (S.C.)) the Supreme Court has held that the revenue could not be allowed to raise submissions for the first time in a second appeal before the Tribunal. 9. The same principle has been followed by a Division Bench of this Court in Bajaj Hindusthan Ltd. vs. Union of India in holding that in an appeal before this Court, a ground which was not raised before and decided by the Tribunal, would not be permitted to be urged." (emphasis supplied) 39. This issue was also examined by the Supreme Court in Neelima Srivastava. Writ Petition No. 3316 of 1986 was filed before the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Umadevi. The Supreme Court further observed that merely because the principles followed by the High Court while deciding the Writ Petition on 03.01.2006 had been over-ruled by the Constitution Bench judgment of the Supreme Court, it would not mean that the final adjudication between the parties, which had attained finality, can be set at naught. In fact, the Supreme Court held that the judgment which had attained finality has to be assailed and "got rid of in a manner known to or recognized by law". The Supreme Court further held that mere overruling of the principles by a subsequent judgment will not dilute the binding effect of the decision which had otherwise attained finality. The relevant portions of the judgment of the Supreme Court in Neelima Srivastava are reproduced below: "28. Admittedly, when the judgment dated 23.01.2006 was passed by the High Court in the earlier two Writ Petitions filed by the appellant, the dictum of Umadevi (3) was not even in existence as the said judgment was rendered subsequently on 10.04.2006. ***** 30. It becomes absolutely clear from the above clarification that earlier decisions running counter to the principles settled in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court as the same may not only tantamount to an abuse of the process of the Court but would have far reaching adverse effect on the administration of justice. ***** 39. Analyzing the entire facts of the case and upon consideration of the matter and settled legal position, we are of the considered view that the impugned judgment passed by the Division Bench of High Court is not liable to be sustained and is hereby set aside. The appeal, accordingly, stands allowed. The appellant is held entitled to be regularized with all consequential benefits which may be extended to her within a period of three months from today." (emphasis supplied) 40. It would also be useful to refer to the decision of a Division Bench of the Tribunal in Global Constructions. The Tribunal noticed that the impugned order had partly sanctioned the refund but credited it to the Consumer Welfare Fund. The Tribunal held that though it is true that it was observed by the Supreme Court in ITC that no refund can be entertained unless the order of assessment or self-assessment is modified but as the order sanctioning refund had attained finality, this plea cannot be permitted to be raised by the department. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings or in appellate proceedings before the Commissioner (Appeals). In case revenue was aggrieved by adjudicating authority not proposing to add such charge to arrive at the assessable value, the correct course would have been to file appeal or cross objections before the Commissioner (Appeal). Since revenue has proceeded not to file any appeal/ cross objections before the Commissioner (Appeal) they could not have taken this ground for first time while filing the appeal before this Tribunal." (emphasis supplied) 44. It clearly follows from the aforesaid decisions that if the department does not challenge a finding of the adjudicating authority by filing an appeal before the Commissioner (Appeals), than that finding of the adjudicating authority attains finality and the department cannot be permitted to subsequently raise this issue in a higher forum. This is what was observed by the Allahabad High Court in Indian Farmers Fertilizers. In Neelima Srivastava it was also held by the Supreme Court that an order which has attained finality between the parties can only be assailed in a manner known to law and mere over-ruling of the principles followed in the said order by a subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITS 47. What remains to be decided is whether the incidence of duty had passed on to the buyers. 48. To substantiate that incidence of duty had not passed on to the buyers, the appellant had placed the certificate dated 29.12.2015 issued by a chartered accountant in respect of the imports made at Delhi. The said certificate is reproduced below: "AUDITOR CERTIFICATE I. With regard to the imports made by M/s. Nokia India Sales Private Limited ('the Company') at Delhi, the Company has paid Countervailing Duty of Customs ('CVD') under Section 3(1) of the Customs Tariff Act, 1975 and NCCD (along with applicable cess as applicable) of Rs. 36,289,329/- as has been evidenced by various tax payment challans (referred in the sheet enclosed herewith). II. Pursuant to our review of books of accounts and other relevant records produced by the Company before us, we hereby certify: A. That we, M/s. KRA & Co., Chartered Accountants, having its business place at H-1/208, Garg Tower, Netaji Subhash Palace, Pitampura, New Delhi - 110034, have Sales Private Limited, a private limited company incorporated as per provision of Companies Act, 1956, having its Office situated at 807, New De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f all goods imported and sold as covered by the subject claim. E. The Company has filed only single claim against all bills of entries referred in Annexure A. F. This certificate is solely for the purpose as set forth in the first paragraph of this certificate and is not to be used, referred to or distributed for any other purpose without our prior written consent. For KRA & Co. FRN: 020266N Chartered Accountants Rajat Goyal Partner Membership No.: 503150 Place: Delhi Date: 29/12/2015 Encl: Details of Tax Payment Challans Annexure A" (emphasis supplied) 49. A similar certificate with similar Annexure A was also filed by the appellant in respect of the imports made at Hyderabad. The adjudicating authority, in respect of the refund applications filed by the appellant claiming refund of additional duty of customs, did not accept the certificates and held that the appellant had not been able to prove that the incidence of duty had passed to the buyers. The appellant filed appeals before the Commissioner (Appeals), which appeals were rejected. Against the order passed by the Commissioner (Appeals), the appellant filed Customs Appeal No. 30153 - 30154 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Books of Accounts of the claimant and certified that the price at which the imported goods were sold to buyers has not increased in 2014-15 due to increase in the rate of CVD in 2014-15 or before 2014-15. The customs duty as refund has not been recovered from the customers or any other person separately in any manner. One the Chartered Accountant's certificate, I rely upon the following decisions: ***** 27. I find that the above mentioned citations are squarely applicable in the present case. In this case, the claimant had imported the mobile phones and paid CVD duty @6%. However, in pursuant of the decision of the Hon'ble Supreme Court in the case of M/s. SRF Ltd. Vs. Commissioner of Customs, Chennai, had filed the claim of refund of CVD duty paid in excess, as per Sr. No. 263A of Notification No. 12/2012-CE as amended. The Chartered Accountant (KRA & Co. New Delhi) of the said claimant has already certified vide his letter dated 29.12.2015 that "In our view as a business practice any variation/increase in tax burden has been absorbed by the Company and same is evident from the cost sheets examined. Further, the claimant has not claimed the refund pertaining to the items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment cannot be permitted to contend in this appeal that an identical certificate issued by the same chartered accountant for the imports made at Delhi should not be accepted. 56. In this connection, reference can be made to the decision of the Supreme Court in Marsons Fan Industries, wherein it has been held: "3. Mr. Joseph Vellapally, learned senior counsel appearing for the appellant has brought to our notice that in a case pertaining to earlier period from February 1982 to December 1982 of the assessee, the Collector (very same officer) in Order (Original) No. 61 (30-D) 87-Collr. 57/89, dated 21st July 1989 took the view that rotors and stators were incomplete and were unfinished goods not known in the market as stators and rotors. He also states that the subsequent order dated 21st July 1989 was brought to the notice of the Tribunal but the Tribunal did not take note of it. In support of his assertion, learned senior counsel has filed an affidavit of the counsel who had appeared for the assessee before the Tribunal. He further states that the Department has accepted the subsequent decision dated 21st July 1989 for the period February 1982 to December 1982. He submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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