2011 (4) TMI 799 - AT - Customs

Refund of excess duty paid - Unjust enrichment - Duty under protest on the enhanced value - Held that - Since, the appellants have filed Bills of Entry to the Assistant Commissioner, Customs, for import of Mixed Acid Oil and Mixed Fatty Acid Oil it is seen on its perusal that the declared value was rejected and the transaction value was enhanced by the assessing authority without citing any reason or furnishing any evidence of any contemporaneous import of higher prices of similar goods having same qualities and comparable parameters, on the basis these Bills of Entry were assessed - the orders of the Commissioner (Appeals) and the orders of the assessment enhancing the prices are set aside and the matter remanded to the original authority for issue of speaking orders after disclosing the evidence for proposed enhancement and after hearing the appellants.

Summary

Issues: Appeal against rejection of transaction values, unjust enrichment, failure to issue speaking orders.

Analysis:
1. Rejection of Transaction Values: The appellants imported various consignments and declared prices, which were rejected by the Assistant Commissioner of Customs who enhanced the prices without providing a valid basis for doing so. The Commissioner (Appeals) focused on unjust enrichment instead of addressing the grounds raised by the appellants. The appellants contended that no valid evidence was used to reject the transaction values and enhance the assessable value. The Tribunal noted that the assessment orders did not specify the reasons for rejecting the declared values or provide evidence of contemporaneous import prices. The appellants paid duty under protest and requested speaking orders, which were not issued by the assessing authority.

2. Unjust Enrichment: The Commissioner (Appeals) based the decision on unjust enrichment, stating that the appellants had not proven that they did not pass on the additional duty to their customers. As per Section 28 D of the Act, it was presumed that the duty incidence had been passed on to the buyers. The Tribunal found that the Commissioner's decision was not relevant to the appeals and that the principle of unjust enrichment should not have been the sole basis for rejecting the appeals. The appellants' request for setting aside the enhanced value and refund of excess duty paid was not adequately considered.

3. Failure to Issue Speaking Orders: The Tribunal emphasized the importance of issuing speaking orders after disclosing the evidence for proposed enhancement and hearing the appellants. It was noted that the assessing authority did not provide a valid reason for the enhancement and failed to issue speaking orders despite the appellants' request. Therefore, the Tribunal set aside the orders of the Commissioner (Appeals) and the assessment enhancing the prices, remanding the matter to the original authority for issuing speaking orders promptly and preferably within three months.

In conclusion, the Tribunal allowed the appeals by way of remand, directing the original authority to re-examine the issue of transaction values, unjust enrichment, and the necessity of speaking orders to ensure a fair and transparent assessment process.