2010 (10) TMI 709 - AT - Customs

Refund claim - cess on the agricultural products exported - Revenue is not disputing the fact that the amount received by the respondent from the up-country party is less than the FOB value of the shipping bills, the Department called for explanation and assessee through their representative explained to the Adjudicating Authority that the amount being an amount of cess, which was paid but was not payable and hence, did not collect this amount from the foreign purchasers - Find that this explanation was accepted by the Adjudicating Authority and upheld by the ld. Commissioner (Appeals) - Hence, the Revenue has not put forth any evidence to contradict the concurrent factual finding of both the lower authorities - In the absence of any such evidence or submission, an adverse inference has to be drawn against the Revenue.

Summary

Issues:
Refund claim under Agricultural Produce Cess Act, 1940 post-repeal - Burden of proof on passing cess incidence to buyers - Adjudication on refund claim validity - Dispute on FOB value realization - Adherence to legal procedures in refund process.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore stemmed from a refund claim filed by the respondent concerning cess payments made post-repeal of the Agricultural Produce Cess Act, 1940. The respondent had paid cess on exported agricultural products during a specific period, even after the Act's repeal, leading to a refund claim being processed by the Adjudicating Authority. The Order-in-Original sanctioned a refund amount to the respondent, which was accepted by them, but disputed by the Revenue, prompting an appeal to the Commissioner (Appeals) by the Revenue.

The crux of the issue revolved around the burden of proof regarding passing on the incidence of cess to buyers and the realization of sale proceeds vis-a-vis the FOB value declared in Shipping Bills. The Revenue contended that the Commissioner (Appeals) erred in upholding the Order-in-Original without critically examining the reasons for the discrepancy in sale proceeds and the lack of evidence linking the shortfall to the cess amount. Additionally, the Revenue argued that the exporter failed to disprove unjust enrichment as per legal precedents, emphasizing the exporter's duty to demonstrate non-passing of the cess burden to buyers.

Conversely, the respondent's counsel argued in favor of the Commissioner (Appeals)' decision, highlighting adherence to legal principles and citing a prior order-in-appeal in a similar matter. The Tribunal, after considering submissions from both sides and reviewing the records, found that the refund claim was valid as the cess amount paid by the respondent post-repeal was not legally enforceable. Moreover, the Tribunal noted the absence of evidence from the Revenue to challenge the explanation provided by the respondent regarding the discrepancy in sale proceeds, leading to an adverse inference against the Revenue.

Ultimately, the Tribunal upheld the Order-in-Appeal, dismissing the Revenue's appeal for lack of merit. The decision was based on the factual findings of the lower authorities, affirming the legality of the impugned order and concluding that the Revenue's appeal did not present any valid grounds for reversal. The cross-objection filed by the respondents in support of the Order-in-Appeal was also disposed of in line with the Tribunal's decision.