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Issues involved:
The issues involved in the judgment are the denial of refund of interest amount u/s Advance Licence due to alleged passing on of incidence of interest to customers and the contention of appellants regarding duty payment and export of goods. Refund of interest amount u/s Advance Licence: The appellants imported goods under Advance Licence without duty payment for manufacturing finished products for export. They warehoused the imported goods but faced delay in cancelling the bond due to delayed receipt of remittance for exported goods. The department demanded interest on duty amounting to Rs. 36,982, which the appellants paid as a deposit. After proving receipt of final remittance, the bond was cancelled, and they sought a refund of the interest amount. The refund was denied on the grounds of inability to prove non-recovery from customers and passing on of interest incidence. Contention of the appellants: The appellants argued that since both raw materials and finished goods were imported without duty payment, the question of passing on duty incidence does not arise. They had export orders before import, and the prices remained unchanged until export. Therefore, the assumption of interest recovery through price increase was not applicable. Once goods were exported as per requirements, no interest payment was due, and any alleged recovery from customers was incorrect. They contended that denial of refund was unjustified. Judgment: After hearing both sides, the judge found that no duty was applicable on imported raw materials or exported finished goods, and prices remained constant throughout. Consequently, the recovery of interest was deemed incorrect, and the passing on of interest incidence to customers was irrelevant. The judge set aside the Commissioner's order and directed immediate refund of the deposit. (Separate Judgment by Judge) No separate judgment was delivered in this case.
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