2016 (9) TMI 83 - AT - Central Excise

Refund claim - cess collected under the Agricultural and Processed Food Products Export Cess Act, 1985 which was repealed w.e.f. 01-06-2006 - amount paid under protest - unjust enrichment - FOB value was inclusive of cess and that its incidence had been passed on - Held that - by following the dictum laid by the Hon ble High Court in the Asia Pacific Commodities Ltd Vs Asst. Commissioner of Customs, Kakinada-I 2012 (11) TMI 919 - ANDHRA PRADESH HIGH COURT wherein it was held that the refund of cess is not hit by the bar of unjust enrichment, the facts and issue being identical, we hold that refund of cess is not hit by unjust enrichment and the appellant is eligible for refund. - Decided in favour of appellant

Summary

Issues involved:
Refund claim of cess collected under the Agricultural and Processed Food Products Export Cess Act, 1985 which was repealed w.e.f. 01-06-2006.

Analysis:

Issue 1: Refund claim of cess collected under the Agricultural and Processed Food Products Export Cess Act, 1985
The appellant, a customs house agent for M/s ITC Limited, exported long Grain Rice from Kakinada Port on behalf of ITC Limited. The Agricultural and Processed Food Products Export Cess Act, 1985 imposed a cess of 0.5% on the FOB value of agricultural produce exported until 31-05-2006. Post the repeal of the Act, the Customs Department at Kakinada insisted on cess payment for shipments made before the repeal date. The appellant filed a refund claim dated 08-09-2006 for the amount paid under protest, which was refunded by the Assistant Commissioner of Customs. The Department appealed against these orders on the grounds of unjust enrichment and passing on the incidence of cess.

Issue 2: Legal Precedent and Interpretation
During the hearing, the appellant's counsel referred to a CESTAT judgment in the case of ITC Ltd vs Commissioner of Customs, Visakhapatnam, which was further appealed in the High Court of Andhra Pradesh in the case of Asia Pacific Commodities Ltd Vs Asst. Commissioner of Customs, Kakinada-I. The High Court held that the refund of cess is not barred by unjust enrichment if the FOB value does not include the duty paid under the Cess Act. The Court emphasized that the presumption of unjust enrichment is rebutted if the invoice value is the same as the FOB value and if the sale contract does not include the cess amount.

Conclusion:
Following the High Court's ruling in the Asia Pacific Commodities Ltd case, the Appellate Tribunal held that the appellant is eligible for the refund of the cess collected under the repealed Agricultural and Processed Food Products Export Cess Act, 1985. The Tribunal allowed the appeal, granting consequential reliefs to the appellant based on the legal precedent and interpretation provided by the High Court.