2024 (10) TMI 513 - AT - Customs

Refund of export duty being the excess duty paid on account of downward revision of export duty - price revision clause - rejection on the ground that the appellant failed to produce documents to rebut the presumption under Section 28D of the Customs Act, 1962 - to discharge the burden to show that incidence of duty had not been passed on to others - principles of unjust enrichment - HELD THAT - The learned Commissioner in the impugned order, without analysing the documents concluded that appellant had only placed the balance sheet for the year 2007-08 and 2009-10 but failed to produce any bills, vouchers, receipts relating to various expenses relatable to cost of the goods for verification and rejected the argument of the appellant that the incidence of export duty was borne by them and not passed on to the overseas buyers. On going through the cost sheet duly certified by the Chartered Accountant enclosed with the appeal paper book, we find that in arriving the cost of the material, the export duty amount was calculated @ Rs.51/- per MT for 20102 MT, which was shown separately and not included in the FOB value. The Hon ble Andhra Pradesh High Court in the case of ASIA PACIFIC COMMODITIES LTD. VERSUS ASSISTANT COMMR. OF CUS., KAKINADA-I 2012 (11) TMI 919 - ANDHRA PRADESH HIGH COURT , more or less analysing a similar FOB value contract rejecting the contention of Department that bar of unjust enrichment is applicable in such cases observed ' In these appeals, the invoice value is also FOB value. Therefore it cannot be said to include the duty paid under the Cess Act and, therefore, the presumption under Section 28D of the Act stands rebutted by the appellants. The CCE (A) went utterly wrong in construing the point A6 ignoring paragraph 14 of Incoterms as well as the sale contract between the appellant and buyer. Therefore the CESTAT was justified in holding that the finding of CCE (A) that FOB value included the cess is unsustainable.' Further, this Tribunal in M/S. MUNEER ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS, MANGALORE 2024 (3) TMI 1054 - CESTAT BANGALORE , in similar circumstances analysing the admissibility of refund of export duty paid consequent to issuance of Notification No.62/2007 dated 03.05.2007, on export of Iron Ore fines against FOB contracts held that incidence of duty has not been passed on to overseas buyers. Further, the Circular No.18/2008-Cust dated 10.11.2008 referred to by the Department in support of their case is not applicable to the facts of the present case inasmuch as under the said Circular, the practice of determination of assessable value of export of goods was continued to be from cum-duty price on back ward calculation till 31.12.2008 in consonance with long standing practice followed by various Customs Houses; however, the practice was discontinued w.e.f. 01.01.2009. There are no merit in the impugned order. Consequently, the impugned order is set aside being devoid of merit and the appeal is allowed.

Summary

Issues:
1. Refund of excess export duty paid.
2. Burden of proof regarding passing on of duty incidence.
3. Interpretation of FOB contract terms.
4. Applicability of Circular No.18/2008-Cus.
5. Precedents on refund claims and unjust enrichment.

Detailed Analysis:
1. The appeal was filed against an Order-in-Appeal by the Commissioner of Customs regarding a refund claim for excess export duty paid on Iron Ore fines. The appellant exported goods under a contract with a foreign buyer, but the refund was directed to the Consumer Welfare Fund. The main issue was the entitlement of the appellant to the refund of Rs.50,25,500/- due to a downward revision of export duty.

2. The appellant argued that they had not passed on the duty incidence to the buyers as per the FOB contract terms. They provided evidence such as cost sheets, financial statements, and a Chartered Accountant's certificate to support their claim. The authorities below had rejected the claim based on the appellant's failure to prove non-passing of duty incidence.

3. The Tribunal analyzed the FOB contract terms and referred to precedents such as the judgment of the Hon'ble High Court of Andhra Pradesh and decisions of the Tribunal. The Tribunal found that the appellant had sufficiently demonstrated that the duty incidence was not passed on to the buyers, based on the evidence provided.

4. The Revenue argued based on Circular No.18/2008-Cus, which was found to be not applicable to the case as the practice of determination of assessable value changed from 01.01.2009. The Tribunal held that the Circular did not support the Revenue's case.

5. Relying on precedents and the evidence presented by the appellant, the Tribunal set aside the impugned order, allowing the appeal with consequential relief. The Tribunal concluded that the appellant was entitled to the refund of the excess export duty paid, as the duty incidence was not passed on to the overseas buyers as per the FOB contract terms.

This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the arguments presented by both parties and the Tribunal's reasoning based on legal principles and precedents.