2012 (4) TMI 168 - AT - Customs

Appeal filed against the impugned order passed by Commissioner (Appeals) on the ground of rejection of transaction value of imported goods is not sustainable and unjust enrichment as appellant had not produced any evidence on record to show that the burden of duty has not been passed on to the buyer - AO did not agree with the value declared by the appellant and enhanced duty to be paid - appellant paid duty on the enhanced value Held that - As per the provision of Section 28 D of the Customs Act, presumption is that incidence of duty has been passed on to the buyer by the appellant. This presumption is rebuttable. In the present case, we find that there is no opportunity granted to the appellant to rebut the presumption that the burden of duty has been passed on to the buyer - the impugned order is subject to the principle of unjust enrichment and the matter is remanded to the adjudicating authority in respect of consequential relief in pursuance of the order passed by the Commissioner (Appeals) and adjudicating authority will decide after affording opportunity of hearing to appellant.

Summary

Issues:
1. Rejection of transaction value of imported goods
2. Grounds of unjust enrichment

Analysis:

Issue 1: Rejection of transaction value of imported goods
The appellant imported palm acid oil and cleared it at a transaction value of US $231.70 per metric ton (PMT). However, the assessing authority disagreed with this value and enhanced it to US $323 PMT. Consequently, the appellant paid duty on the enhanced value. The appeal was filed against the rejection of the transaction value. The Commissioner (Appeals) relied on the decision of the Hon'ble Supreme Court in the case of Eicher Tractor Ltd. vs. C.C., Mumbai and held that the rejection by the assessing authority was not sustainable under Section 14(1) of the Customs Act, 1962 read with Rule 4(1) of the Customs Valuation (DPIG) Rules, 1988.

Issue 2: Grounds of unjust enrichment
The Commissioner (Appeals) rejected the appeal on the grounds of unjust enrichment, stating that the burden of duty had not been shown to be non-passed onto the buyer by the appellant. While the Commissioner (Appeals) accepted the appeal on merits, the consequential relief was subject to the principle of unjust enrichment. Section 28D of the Customs Act provides a presumption that the duty burden has been passed on to the buyer, which is rebuttable. In this case, the appellant was not given the opportunity to rebut this presumption. Therefore, the Tribunal modified the impugned order to make the consequential relief subject to the principle of unjust enrichment. The matter was remanded to the adjudicating authority to decide on the consequential relief after affording the appellant an opportunity to be heard.

In conclusion, the Tribunal disposed of the appeal by modifying the impugned order to consider consequential relief in light of unjust enrichment and remanded the matter to the adjudicating authority for further proceedings after providing an opportunity for the appellant to present their case.