2014 (12) TMI 172 - AT - Customs

Denial of refund claim - claim of refund of amount deposited during investigation, confirmed in the original proceedings but tribunal has set aside the part of the demand on the ground of period of limitation - Refund sanctioned but required to be credited to Consumer Welfare Fund as the refund sought falls within the ambit of doctrine of Unjust-Enrichment - MRP based duty valuation - Whether in the refund claims filed by the appellant the bar of unjust-enrichment under the provisions of the Customs Act, 1962 is applicable or not - Held that - Appellant earlier paid duty on MRP at the time of clearance and selling the goods at a MRP. There is no evidence on record brought by appellant that appellant has changed his pattern of sale after July 2005 to the practice what was prevailing before July 2005. As the appellant was following MRP based sale before July 2005 and does not indicate any change in pattern of sale simply saying that amount of ₹ 1,63,59,968/- is shown in their accounts as customs duty receivable, will not be of any evidentiary value that CVD paid has not been recovered from the customers. In view of CESTAT s order dated 26.9.2009 in the case of the appellant the sale prices of ceramic tiles will be deemed MRP for the goods imported and sold after July 2005. By not declaring the MRP at the time of import, it cannot be said that ceramic tiles were not sold at MRP. Further from the case of Seaking marine Services vs. Commissioner of Customs, Mumbai (2010 (6) TMI 427 - CESTAT, NEW DELHI) and GAIL India Limited vs. CCE, Gwalior (2010 (10) TMI 445 - CESTAT, NEW DELHI), relied upon by the Revenue, the ratio laid down is loud and clear that mere claim of deposit of a money during investigation and production of Chartered Accountant s certificate is not the ultimate fact to hold that incidence of duty has not been passed on to the consumers. In the case of present appellant, it is more glaring as appellant are having a sale pattern of declaring MRP at the time of imports and selling the same at that MRP at the time of sale. There is no evidence on record that sale pattern of MRP has been revised by the appellant based on transaction value/ invoice value, after July 2005 to what was prevailing earlier. As the facts are different from the facts of the relied upon case laws, therefore, the same are not applicable to the present proceedings. An amount paid during investigation, when confirmed by appellate authority as duty, will be in the nature of payment of duty - claim of refund rejected - Decided against assessee.

Summary

Issues Involved:
1. Applicability of the doctrine of unjust enrichment.
2. Assessment of Additional Duty of Customs (CVD) on the basis of MRP.
3. Nature of payment made during investigation - whether it is a deposit or duty.
4. Evidence of passing on the duty incidence to the consumers.

Issue-wise Detailed Analysis:

1. Applicability of the doctrine of unjust enrichment:
The core issue is whether the refund claims filed by the appellant are barred by the doctrine of unjust enrichment under the Customs Act, 1962. The first appellate authority upheld the adjudicating authority's decision to credit the refund to the Consumer Welfare Fund, citing the doctrine of unjust enrichment. The appellant's reliance on various judicial pronouncements was differentiated on the grounds of circumstantial flexibility, as observed by the Apex Court in Commissioner vs. Srikumar Agencies [2008 (232) ELT 577 (S.C.)]. The Commissioner (Appeals) also referenced the CESTAT's order in Sree Baidyanath Ayurved Bhavan Limited vs. CCE Nagpur [2009 (238) ELT 680 (Tri. Mum.)], which held that goods sold at MRP imply that the duty incidence has been passed on to the ultimate consumer.

2. Assessment of Additional Duty of Customs (CVD) on the basis of MRP:
The appellant imported ceramic tiles assessed to Additional Duty of Customs (CVD) based on invoice value instead of MRP, as required under Section 4A of the Central Excise Act, 1994. The CESTAT Ahmedabad, in its order dated 26.09.2009, confirmed that the imported tiles were liable to be assessed to duty of CVD on the basis of MRP. However, the demands were deemed time-barred, making the refund payable on procedural grounds rather than on merits.

3. Nature of payment made during investigation - whether it is a deposit or duty:
The appellant argued that the amounts paid during the investigation were in the nature of deposits and not duty, thus not subject to the provisions of refund under Section 28 of the Customs Act, 1962. The appellant cited several case laws to support this argument, including CC vs. Mahalaxmi Exports [2009 (12) TMI 555 (Guj)] and Nissan Copper Limited vs. CCE [2014 (8) TMI 222 (Tri. Ahmd.)]. However, the Revenue argued that the amounts paid during the investigation should be considered as payment of duty since the duty demanded was found payable by CESTAT under Section 4A of the Central Excise Act, 1944.

4. Evidence of passing on the duty incidence to the consumers:
The appellant contended that the amounts paid during the investigation were shown as receivable in the balance sheet, thus not passing the duty incidence to the consumers. The Revenue countered that the appellant's sale pattern remained unchanged, with ceramic tiles being sold at MRP, implying that the duty incidence was passed on to the consumers. The first appellate authority and the CESTAT relied on the precedent set in Shree Baidyanath Ayurved Bhavan Limited vs. CCE Nagpur [2009 (238) ELT 680 (Tri. Mum.)], which held that goods sold at MRP are presumed to have passed on the duty burden to the ultimate consumer unless proven otherwise.

Conclusion:
The appeal was dismissed, with the CESTAT concluding that the appellant failed to provide evidence that the duty incidence was not passed on to the consumers. The amounts paid during the investigation were deemed to be in the nature of duty, not deposits, and thus subject to the doctrine of unjust enrichment. The appellant's arguments and cited case laws were found inapplicable due to differing facts and circumstances. The first appellate authority's order to credit the refund to the Consumer Welfare Fund was upheld.