2019 (12) TMI 245 - AT - Customs

Refund - unjust enrichment - Valuation of imported goods - non-coking coal and Bituminous coal - High Seas Sale - rejection of transaction value - Asst. Commissioner held that importer could not prove the excess duty paid and thus could not satisfy the conditions of Section 18 (5) of Customs Act, 1962 - HELD THAT - The respondents have discharged duty on the transaction value arrived on the basis of final quantity of coal in terms of the contract. It is not the case of the department that the respondents have paid any amount over and above such transaction value. Therefore, in terms of Section 14 of the Customs Act, 1962, the transaction value requires to be accepted as done by the Ld. Commissioner (Appeals). Ld. Commissioner (Appeals) has categorically held that there is a lapse of two to seven months in posting the general voucher vis-a-vis the payments made as duty is only an assumption and the balance sheet as on 31.3.2016 very clearly shows these amounts as receivables under current assets from the department and that this was an ample proof that the application for refund is not hit by unjust enrichment. There is no reason as to why we should interfere with the order of the Ld. Commissioner (Appeals) - the orders passed by Commissioner (Appeals) are legally tenable and sustainable - appeal dismissed - decided against Revenue.

Issues:
1. Provisional assessment of imported coal for want of documents and test reports.
2. Refunds credited to Consumer Welfare Fund instead of importer.
3. Dispute over excess duty paid and satisfaction of conditions under Section 18(5) of Customs Act, 1962.
4. Challenge to the addition of 2% notional high sea sales commissions.
5. Discrepancies in recording duty payments and general entries in the books of account.
6. Disagreement on the transaction value of imported coal based on final quantity and contract terms.
7. Interpretation of Circular No.32/2004-Cus regarding documentary proof for establishing transaction value.
8. Allegation of unjust enrichment and proof of financial status through balance sheet entries.

Analysis:
1. The case involved the provisional assessment of non-coking coal and Bituminous coal imported by the appellants due to the lack of documents and test reports. Subsequently, refunds totaling to ?9,62,728 were sanctioned but credited to the Consumer Welfare Fund instead of the importer, leading to a dispute over excess duty paid and compliance with Section 18(5) of the Customs Act, 1962.

2. The Commissioner (Appeals) held that the financial status of the company, as reflected in the balance sheet, demonstrated the amount receivable by the appellants under various entries, indicating that the claim was not affected by unjust enrichment. Additionally, the challenge to the addition of 2% notional high sea sales commissions was dismissed.

3. The department contended that the importer failed to provide sufficient documentary proof as required by law, especially in relation to the timing of duty payments and general entries in the books of account. The department argued that the final import value should not be less than the price at which the goods were sold by the shipper abroad.

4. The respondents argued that the transaction value of the imported coal should be based on the final quantity as per the contract terms, and variations in value were due to factors like GSV value and calorific content. They presented a chart showing the value at each stage of the transaction chain, highlighting discrepancies in the prices paid.

5. The Tribunal found that the respondents had paid duty based on the transaction value determined by the final quantity of coal, and there was no evidence of payments exceeding this value. The Tribunal upheld the Commissioner (Appeals)' decision regarding the acceptance of transaction value under Section 14 of the Customs Act, 1962.

6. The Tribunal emphasized the importance of documentary proof to establish the transaction value, as per Circular No.32/2004-Cus, and rejected the notion of adding a 2% high sea sales commission when such proof was available. The Tribunal agreed with the Commissioner (Appeals) that the final invoice value, supported by bank payment certificates, should be considered for assessment and refund purposes.

7. Ultimately, the Tribunal found no grounds to interfere with the orders of the Commissioner (Appeals) and upheld the legality and sustainability of the decisions. As a result, all four appeals filed by the department were rejected.

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