TMI Blog1991 (10) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... oride. The petitioners require as one of the raw materials copper scrap for the manufacture of Copper Oxychloride. The petitioners regularly import copper scrap for use in their factory at Bulsar for the manufacture of Copper Oxychloride. 3.Under the Customs Notification No. 122 of 1978 dated 21-6-1978, as amended from time to time a concessional rate of duty is levied on the import of copper scrap which is used for the manufacture of chemicals. While availing of this concessional Customs duty the petitioners furnished an end-use bond in favour of the Customs Department duly guaranteed by the petitioners' Bankers. This bond is for the purpose of ensuring that the copper scrap imported by the petitioners is used for the manufacture of Copper Oxychloride. Once the copper scrap is so consumed a Chartered Accountant's certificate regarding such consumption along with an affidavit is furnished before the Customs Department. The Customs Department after verification cancels the bond. 4.The dispute in the present case relates to the recovery of countervailing duty, that is to say, Additional Customs Duty in respect of copper scrap so imported by the petitioners. The relevant heading f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Rules is required to be followed. The petitioners, being importers of copper scrap, could not follow this procedure. Hence the petitioners were denied the benefit of those exemption Notifications for the purposes of levy of additional duty of Customs at the time when they imported copper scrap. 8.The petitioners filed applications for refund of the additional duty of Customs within the prescribed period but these refund applications were rejected. Exhibit 'O' which is annexed to the petition lists out 31 refund applications for the period 3-5-1982 to 18-11-1986. The numbers of Bill of Entry and the amounts of refund due are also set out against each application in Exhibit 'O'. 9.Exhibit 'Q' gives in a tabular form the date and number of the Order of the Assistant Collector of Customs rejecting the applications of the petitioners. In the present petition the petitioners have challenged the rejection of their refund applications. A copy each of Exhibits 'O' and 'Q' are annexed to this order. 10.It is submitted by the petitioners that the above exemption notifications give complete exemption from payment of excise duty to copper scrap used in the manufacture of chemicals. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to the refunds claimed by them in the petition, their claim must be considered in the light of the Central Excise and Customs Laws (Amendment) Act of 1991 which has come into force. Under this Act, certain amendments have been made inter alia, to the Customs Act, 1962. Under the new Section 27 of the Customs Act which has replaced the earlier Section 27, it is provided, inter alia, that an application for the refund of Customs duty shall be accompanied by such documentary or other evidence (including the documents referred to in Section 28C) as the applicant may furnish to establish that the amount of duty in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty had not been passed on by him to any other person. Provided that where an application for refund has been made before the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section and the same shall be dealt with in accordance with the provisions of sub-section (2) of Section 27. Hence the refund applications of the petitioners are affected by the amendments. 13. Section 27( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant to establish that he has not passed on the incidence of duty to the buyer of these goods, or has not sold these goods, but used them himself. Similarly the buyer of such goods can get the refund if the buyer has not passed on the duty to anybody else. There are also other provisions to ensure clear documentation indicating what is the price of such goods and how much is the duty on such goods and whether it is to be paid by the purchaser of such goods or not. 16. Even under Section 28B which requires that every person who has collected any amount from the buyer of imported goods in any manner as representing the duty of customs shall forthwith pay the amount so collected to the credit of the Central Government subject to what is prescribed in that section, it is envisaged that the goods which are actually imported are sold to a buyer by the importer along with the incidence of the duty of Customs. 17. Section 28C also requires that every person who is liable to pay duty on any goods at the time of the clearance of the goods, prominently indicates in all the documents relating to assessment, the amount of such duty which will form part of the price at which such goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roportion. Nor can there be in such a case the kind of documentation required under the scheme. So that the buyer of Copper Oxychloride cannot claim a refund of any part of the duty on Copper scrap. Where there is no sale of the goods which were imported and no direct transfer of the burden of duty to the buyer of the imported goods, the case falls under clause (a) or (b) of the proviso to Section 27(2). 22. In other words clause (a) also covers all cases where the importer has not sold the imported goods in the same form in which they were imported, but has used or consumed the goods himself. This would include his using up or consuming the imported goods in the manufacture of a different commercial commodity. Clause (b) of the proviso brings out this aspect clearly in the case of an individual. 23. The Statement of Objects and Reasons relating to the Central Excise and Customs Laws (Amendment) Act, 1991 is also relevant as throwing light on the circumstances that brought about the amendment. It is stated in the Statement of Objects and Reasons. "The question of "unjust enrichment" in cases of goods subject to duty of excise or customs has been the subject-matter of discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gredient. In such cases the doctrine of unjust enrichment is not invoked. In the case of HMM Ltd. and Another v. The Administrator, Bangalore City Corporation, Bangalore and Another reported in AIR 1990 S.C. 47 the Supreme Court has dealt with this aspect of the doctrine of unjust enrichment. In the case before the Supreme Court, the Court dealt with the payment of octroi duty on milkfood powder imported in bulk in drums in the city or Bangalore on which octroi was paid at the time of import. The milkfood powder was repacked in small packs and bottles of various sizes and sent to various places outside Bangalore, except a small quantity which was sold in Bangalore City proper. The manufacturer claimed refund of octroi for the quantity of milkfood powder which was sent outside Bangalore after repacking and/or rebottling. One of the contentions which was raised before the Supreme Court was that refund of octroi cannot be given because there was possibility' of unjust enrichment of the claimants. Negativing this contention, the Supreme Court observed that the octroi in the case before it was a duty on the entry of the raw materials, for coming in. "It is the duty on the coming in of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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