2005 (7) TMI 124 - AT - Central Excise

Refund claims - duty payments - Maintainability of - Unjust enrichment - HR Coils - classification under Heading 73.08 - verification of original documents - Whether the assessee has passed on the incidence of duty element paid on the consignment in question to any other person by adding the cost of excess duty element while calculating the cost of their final products - HELD THAT - In any case on the 11 exbond BE s no orders on assessment afresh are were required on plain reading of Section 68 of the Customs Act 1962 governing exbond BEs. The question of no challenge to the assessments on these 11 BEs was not relevant or called for. There can be no appeal against these BEs since there is no order of assessment required to be effected on such BE filed u/s 68 of the Customs Act 1962. Assessment orders were to be arrived at on into Brand BEs as provided for u/s 17 the Customs Act 1962 the question No. (3) framed by the original authority in his order is not called for decision thereon is not as per law. The non submission of original TR6 as per question No. 2 framed finding arrived of the same having been submitted to be not satisfactory cannot be upheld. The duty payments of the same could be verified from the other proceedings documents filed with the department. In any ease refunds if otherwise eligible cannot be refused for non supply of original TR-6. A procedure of indemnity Bonds is prescribed for such cases. The appellants Balance sheet for the year 30-6-84 shows the claim for amount of Rs. 41, 32, 530/- towards excess Customs duty paid. Certificates of Chartered Accountant dated 26-10-2002 indicate that this amount in question was not claimed as expense by this manufacturer importer to be included in the costing of the tubes manufactured sold. Therefore the expense has been incurred by the importer and borne by him and cannot be said to have been passed on expenses in manufactured goods sold. Affidavits of Jt. President of the assessee company were produced to claim that the excess duty paid was not passed on to the Customer. The lower authorities reliance on M/s. Solar Pesticides case 2000 (2) TMI 237 - SUPREME COURT is therefore not to be upheld since this material would entitle the conclusion that the burden was not passed on. The bar of unjust enrichment is rebuttable presumption and has been effectively rebutted. The lower authorities rejection of CAs certificate on ground of not supported by Cost Certificates for the final products therefore not accepted cannot be upheld. The Costs Certificates could be sought for and obtained. Rejecting the CAs certificate lightly without any evidence cannot be upheld. The reliance placed by the Revenue on the case of CC v. ELTECH Enterprises 1998 (2) TMI 349 - CEGAT MUMBAI will not be applicable as the same was a decision based only on Chartered Accountants certificate Present case is on facts of the amounts claimed as excess duty paid shown as balance and not used in cost of manufacture. In the present case the ratio of that case cannot be applied. If the department wants to not to rely on the CA s certificate they can get their Cost Accountant appointed get the costing verified. We cannot upheld the rejection of the refund the reasons as arrived. Thus we would set aside the order remit the matter back to the original authority to redetermine the refund amount the interest due thereon pass an order after hearing the appellants pay the amounts as an Indemnity Bond if required. Appeal to be allowed as remand to Dy. Commissioner for de novo determination in above terms. Appeals allowed in above terms.

Issues Involved:

1. Classification of imported H R Coils.
2. Refund claims for excess duty paid.
3. Applicability of the principle of unjust enrichment.
4. Requirement of original documents for refund claims.
5. Finality of assessments on Ex-Bond Bills of Entry.

Detailed Analysis:

1. Classification of Imported H R Coils:

The appellants imported H R Coils and claimed classification under Heading 7308 of the Customs Tariff. However, the proper officer assessed and classified the same under Heading 73.13 on the into Bond BE. The appellants filed a writ petition in the Mumbai High Court and obtained an interim order directing duty payments under Heading 7308 and executing a Bank Guarantee for 30% of the differential amount. The writ petition was finally disposed on 18-8-93 upholding the classification under Heading 73.08. The department's Civil Appeal in the Supreme Court was dismissed on 20-2-2001. Therefore, it was concluded that the appellants did challenge the assessments as arrived on the subject BE's for the goods imported.

2. Refund Claims for Excess Duty Paid:

The appellants filed refund claims on 11 ex-bond clearances effected at higher rates, which were initially rejected. The Commissioner (Appeals) upheld the rejection, stating that the appellants had not filed any appeal against the assessment order made on the Bills of Entries, making the refund claim non-maintainable. However, it was found that no orders on assessment afresh were required on the 11 ex-bond BE's, and there can be no appeal against these BE's since no order of assessment is required under Section 68 of the Customs Act, 1962. Therefore, the question of no challenge to the assessments on these 11 BE's was not relevant.

3. Applicability of the Principle of Unjust Enrichment:

The principle of unjust enrichment was applicable as per Notification No. 30/91-C.E. (N.T.) dated 19-9-91. The lower authorities relied on the case of Union of India v. Solar Pesticides, which stated that the incidence of duty passed on to another person includes cases where the duty paid on raw material is added to the price of finished goods. However, the appellants submitted a Chartered Accountant's certificate and an affidavit from the Joint President of the company indicating that the excess duty paid was not included in the cost of finished goods. The lower authorities' rejection of the CA's certificate was not upheld, and it was concluded that the bar of unjust enrichment was effectively rebutted.

4. Requirement of Original Documents for Refund Claims:

The lower authorities rejected the refund claims due to non-submission of original TR6 documents. However, it was found that refunds, if otherwise eligible, cannot be refused for non-supply of original TR-6. A procedure of indemnity bonds is prescribed for such cases, and the same should be followed. Therefore, the rejection of refunds on this ground was not upheld.

5. Finality of Assessments on Ex-Bond Bills of Entry:

The lower authorities held that the refund claim was non-maintainable because the appellants had not filed any appeal against the assessment order made on the Bills of Entries, making the assessments final. However, it was found that no orders on assessment afresh were required on the 11 ex-bond BE's, and there can be no appeal against these BE's since no order of assessment is required under Section 68 of the Customs Act, 1962. Therefore, the question of no challenge to the assessments on these 11 BE's was not relevant.

Conclusion:

The order was set aside, and the matter was remitted back to the original authority to redetermine the refund amount and the interest due thereon. The original authority was directed to pass an order after hearing the appellants and pay the amounts as an indemnity bond if required. The appeal was allowed as a remand to the Deputy Commissioner for de novo determination in the above terms. The appeals were allowed accordingly on 15-7-2005.

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