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2011 (3) TMI 1316 - AT - CustomsRefund for cess - principles of unjust enrichment - appellants claimed that as per the contracts with their foreign buyers, they were liable to bear export duties, taxes, etc. The invoice price was a composite price and it could be inferred that the duty burden had not been passed on. - Held that - As find that from the vrious definition it is not possible to arrive at a definite conclusion that the FOB value includes the cess paid on export of rice especially in cases where the contract with the foreign buyer specifically provided that the export duty/taxes etc. were to the account of the seller. In all the cases except in the case of M/s. Al Gyas Exports Pvt. Ltd., the appellants have furnished copies of the relevant contracts containing the above clause. Unless the Department is satisfied on examination of the documents showing remittance received by the appellants, the finding in the impugned order that the FOB value recovered included the impugned cess cannot be sustained. As it is, there is no reliable finding in the impugned order to conclude that the disputed cess amounts had been recovered as part of the FOB value. There is no dispute that provisions in the Act pertaining to levy, collection, refund, etc., apply to levy, collection, refund, etc., of cess levied under the APFPEC Act. As provisions relating to levy and collection are borrowed, the provisions relating to short levy, short payment, concomitant disputes and the remedies provided in Sections 128 and 129D(2) of the Act should also be held to have been borrowed for the purpose of APFPEC Act by virtue of the above sub-section. Therefore, we reject the objection raised by M/s. Al Gyas Exports Pvt. Ltd. As regards the claim that a refund claim for excess duty paid can be validly made without challenging assessment under the Act relying on the judgment of the Apex Court in the case of Karnataka Power Corporation Ltd. v. CC (Appeals) 2002 (4) TMI 79 - SUPREME COURT OF INDIA it is note that a Larger Bench of the Tribunal had considered the ratio of the above decision and the decisions of Flock India case 2000 (8) TMI 88 - SUPREME COURT OF INDIA and Priya Blue Industries case 2004 (9) TMI 105 - SUPREME COURT OF INDIA and held that a refund claim was not maintainable unless the assessment order in pursuance of which duty paid was challenged and modified/set aside. As regards the challenge to the impugned order for the reason that the appeal disposed by it had been filed following review initiated after the period prescribed, it is observed that this ground concerns facts. This ground is taken first in the proceedings. The ground is not substantiated with details of the relevant dates, etc. Moreover, the assessee had participated in the proceedings before the Commissioner (Appeals) without raising this objection. In the circumstances, reject the challenge to the impugned order raised by M/s. Al Gyas Exports Pvt. Ltd. Appeal dismissed.
Issues Involved:
1. Refund of cess paid on export of rice under the repealed APFPEC Act. 2. Applicability of the principles of unjust enrichment to the refund claims. 3. Validity of refund claims without challenging the assessment orders. 4. Timeliness and procedural aspects of the Department's appeal. 5. Applicability of provisions of the Customs Act, 1962 to the APFPEC Act. Detailed Analysis: 1. Refund of cess paid on export of rice under the repealed APFPEC Act: The appellants, exporters of rice, paid a cess of 0.5% ad valorem under the APFPEC Act on exports made in June 2006. The APFPEC Act was repealed effective 1-6-2006. The original authority sanctioned the refund claims under Section 27 of the Customs Act, 1962. However, the Department contested these refunds, arguing that the principles of unjust enrichment applied. The Commissioner (Appeals) found that the exporters had included the cess in the FOB value and thus passed the burden to the buyers. The appellants argued that the cess was paid without authority of law and should be refunded. 2. Applicability of the principles of unjust enrichment to the refund claims: The Department argued, citing the Solar Pesticides case, that the principle of unjust enrichment applied as the FOB value realized by the exporters included the cess. The Commissioner (Appeals) concluded that the cess was included in the FOB value based on the definition of FOB in Incoterms, 2000. The appellants contended that their contracts specified that export duties and taxes were on the seller's account, implying the duty burden was not passed on. The Tribunal found that the definition of FOB did not conclusively prove that the cess was included in the FOB value and noted the lack of reliable findings to support the Department's claim. 3. Validity of refund claims without challenging the assessment orders: The Tribunal referred to the Priya Blue Industries case, which held that a refund claim is not maintainable unless the assessment order is challenged and modified. The Tribunal observed that the appellants did not successfully challenge the assessments on the shipping bills. The Tribunal upheld the view that refunds cannot be granted unless the assessment orders are contested. 4. Timeliness and procedural aspects of the Department's appeal: M/s. Al Gyas Exports Pvt. Ltd. argued that the review orders were passed beyond the permissible time, making the Department's appeal time-barred. However, this argument was not substantiated with relevant dates and was raised for the first time before the Tribunal. The Tribunal rejected this challenge, noting the appellant's participation in the proceedings without earlier objections. 5. Applicability of provisions of the Customs Act, 1962 to the APFPEC Act: M/s. Al Gyas Exports Pvt. Ltd. contended that the provisions of the Customs Act relating to review and appeal were not applicable to the APFPEC Act. The Tribunal noted that Section 3 of the APFPEC Act made the provisions of the Customs Act applicable to the levy and collection of cess, including those relating to refunds and exemptions. Therefore, the Tribunal rejected the appellant's objection, affirming that the Customs Act's provisions applied to the APFPEC Act. Conclusion: The Tribunal rejected all the appeals, affirming that the principles of unjust enrichment applied, and the refund claims were not maintainable without challenging the assessment orders. The procedural objections regarding the timeliness of the Department's appeal and the applicability of Customs Act provisions to the APFPEC Act were also dismissed. The appeals were pronounced rejected in court on 8-3-2011.
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