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TMI Blog2013 (12) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... ng against them. However, it is seen that said order of the adjudicating authority was set aside by Commissioner (Appeals) who held that the respondents are eligible for benefit of notification. 2. On receipt of order of Commissioner (Appeals), appellant filed a refund claim of duty of Rs.35,91,820/- paid by them at the time of clearance of imported goods, under protest. 3. It is seen that said order of Commissioner (Appeals) was challenged by the Revenue before the Tribunal and Tribunal vide its final order No. C/310/08 rejected the appeal filed by the Revenue by holding that the assessee was entitled for exemption in terms of notification in question. It was also observed by the Tribunal that duty was paid by the assessee at the time of clearance of the goods, under protest. For better appreciation, we reproduce the relevant part of the said order. "3. When the matter was heard on earlier occasions, we directed the Departmental Representative to produce the original clearance documents to see whether the claim of the importer that they have claimed the benefit of Notification No. 25/99 and the payment of higher duty was under protest. The original documents produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot arise. 6. As we have already observed the question required to be decided in the present appeal is as to whether the duty paid by the assessee at the time of import of goods stand collected by them from their buyers so as to make themselves unjustly enriched. The appellants have strongly relied upon the certificate of Chartered Accountant. We are reproducing the same for better appreciation. "TO WHOMSOEVER IT MAY CONCERN We have gone through the Purchase, Manufacturing and sales record of M/s. Overseas Business Corporation having its factory at A-30, Sector-16, NOIDA (UP) and after perusal of all above we hereby certify the following: 1. That during April, 2003 to Sep'2003, the firm had been importing CD Pick Up Lense Unit at Concessional Rate of Duty of 5%+16%+4% and the cost of Manufacturing per unit of CD Deck Mechanism works out to be Rs. 110.50 per piece as detailed in enclosed chart. The average basic selling price per piece of CD Deck Mechanism during this period was Rs. 130.84 paisa. According the firm was earning a gross margin of 15.55% on its sales value. 2. That during Oct'2003 to March'2004, the firm had imported CD Pick up Lense Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, in the table produced before the Commissioner (Appeals) has shown the landed cost of CD pick up lense unit as Rs. 109.49 which is inclusive of higher duty paid by them, does not mean that customs duty paid by them at the time of clearance of said pick up lense unit makes an integral component of their final product, which stand sold at the price lower than the manufacturing cost which stands arrived at by then by including the higher landed cost of the imported goods. The appellants have only tried to establish that after the higher duty paid cost of CD pick up lense is added in the manufacturing cost, the same comes to Rs.123/- which is admittedly higher than the unit sale price of the goods in question. If that be so, the differential duty paid on the imported goods i.e. CD pick up lense unit cannot be said to have been collected by the assessee from their customers. 9. The Commissioner (Appeals) also rejected their claim on the ground that appellant have neither shown the extra amount of duty as recoverable from the department in their balance sheet nor they have brought any other documents to show that duty was not passed on to their customers. We note that an identical re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail sale price was decrease. This fact itself reflects upon only one situation that the extra cost of raw material has not been taken into consideration by the importer at the time of fixing its retail sale price, 12. The appellants have admittedly placed on record the Chartered Accountants certificate certifying that differential duty does not stand recovered by the appellant from their customers. Once the importer having discharged this burden, by placing on record Chartered Accountants certificate, the burden gets shifted to the Revenue to prove by production of positive evidence that such extra duty paid by them stand recovered from their customers. In the present case the Revenue has not advanced any evidence so as to effectively rebut the certificate on record. Such certificate having been given by the Chartered Accountant, based upon the books of accounts maintained by the appellant, in the regular course of the their business has to be given true credence and cannot be brushed aside merely on the basis of assumption and presumptions. For the same reasons, the argument of the learned DR that no businessman sells the goods at a price less than the cost price cannot be apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Member (Judicial). I do not agree with findings on the basis of material facts and evidence on record as we!! as law relating to unjust enrichment, I consider it necessary to record my separate decision in the following paragraphs. 16. Against claim of refund of Additional customs duty of Rs. 35,91,820/- paid on import of input made vide different Bill of Entries during September 2003 to December 2003, held to be exempt from duty in terms of a Notification, by Commissioner (Appeals) vide O-I-A No. CC(A)63/ICD/D-II/06 dated 28,12,2006, the appellant was allowed adjustment thereof towards cenvat credit (MODVAT) to the extent of Rs. 25,28,755/- and balance of Rs. 10,63,065/- was credited to welfare fund on account of bar of unjust enrichment. 17. Being unsuccessful in adjudication, when the appellant came in appeal to learned Commissioner (Appeals), he agreed with the adjudicating authority and found that when landed cost of the input included duty element according to own averment of the appellant and data submitted by the Chartered accountant, that formed part of the cost of the finished goods and such cost recovered by the appellant. Accordingly, if grant of refund is made it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the appellant sold goods at a price lower than its cost was also not demonstrated before both authorities bellow. Therefore mere plea of sale at loss has no force without evidence well tested by adjudicating authority. The appellant makes pulpable plea without cogent evidence. Therefore there is no scope to disagree with the finding of Commissioner (Appeals). 20. Hon'ble Madras High Court held that substantial evidence settles fact without a mere statement in Chartered Accountants' Certificate in following terms: "7. Section 27 of the Customs Act 1962 provides for the claim for refund of duty, A perusal of the said provision would show that the importer will have to satisfy the authorities while seeking such a claim. In other words, until and unless the importer satisfies the authorities with relevant documents, indicating the fact that it has paid the excess amount and the duty has not been passed on to the customers, such a claim cannot be accepted. Further Section 28C and D of the Act provide for price of goods to indicate the amount of duty paid thereon and presumption that incidence of duty has been passed on to the buyer. Therefore, until the contrary is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment and also on the consideration of the facts involved, we are of the opinion that the appeal will have to he allowed and accordingly the same is allowed and the question of law framed is answered in favour of the revenue. 10. Inasmuch as the Tribunal has merely relied upon the certificate of the Chartered Accountant and in order to give sufficient opportunity to first respondent while answering the question of law in favour of the revenue, the order passed by the Tribunal is hereby set aside and the matter is remitted back to the Tribunal for a fresh consideration of the appeal filed before it. The first respondent is permitted to furnish any other substantial evidence in support of his claim for refund. It is made clear that if the first respondent has failed to produce any other evidence, the Tribunal is directed to proceed with the case and decide the same on merits in accordance with law" [Emphasis supplied]. 21. When records of the case reveal that the appellant did not lay any evidence before the adjudicating or first appellate authority to come out of the rigor of unjust enrichment as laid down in Section 27 of Customs Act 1962, it does not deserve any con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uires. " 36. The above principle has been accepted in India. This Court in several cases has applied the doctrine of unjust enrichment. 39. Applying the provision of Section 70 of the Contract Act, 1872 and referring to Fibrosa and Nelson, this Court said : "...It is well established thai a person who seeks restitution has a duty to account to the defendant for what he has received in the accounting by the plaintiff is a condition of restitution from the defendant". [Emphasis supplied] 23. It is common sense that every business man realize entire cost of manufacture with profit from sale of the goods manufactured through its sale price and no sale price is below the cost. Observation of Apex court in case of Mafatlal Industries Ltd. Vs. Union of India in 1997 (89) ELT 247(SC) in this regard is as under: 'The levy under the Excise Act is an indirect tax (duty). A duty of excise is levied on the manufacture or production of goods. Ordinarily, it is levied on the manufacturer or producer of goods. (Since the levy is in relation to or in connection with the manufacture or production of goods, it may be lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost-price plus duty. He cannot survive in business if he does so. Only in case of distress sales, such a thing is understandable but distress sales are not a normal feature and cannot therefore constitute a basis for judging the validity or reasonableness of a provision. Similarly, no one will ordinarily pass on less excise duty than what is eligible and payable, A manufacturer may dip into his profits but would not further dip into the excise duty component. He will do so only in the case of a distress sale again. Just because duty is not separately shown in the invoice price, it does not follow that the manufacturer is not passing on the duty. Nor does it follow therefrom that he manufacturer is obsorbing the duty himself. The manner of preparing the invoice is not conclusive. While we cannot visualize all situations, the fact remains that, generally speaking, every manufacturer will sell his goods at something above the cost-price plus duty. There may be a loss making concern but the loss occurs not because of the levy of the excise duty which is uniformly levied on all manufacturers of similar goods - but for other reasons' [Emphasis supplied]. The original adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the judgment in the case of M/s Manjunath Food and packaging. In the case of CCE Vs Manjunath Food and Packaging [2009(239) ELT A22] the distinguishing fact was that the buyer of goods had made it clear that they could not absorb any additional duties and levies on the agreed prices as evident from their letter to appellant-SSI unit, therefore, refund claim was not barred by unjust enrichment. I have also perused the judgment of Supreme Court in the case of Living media India ltd. In the case of Living media India Ltd. [1998(104) ELT 3(SC)], the distinguishing fact was the special case of newspapers and magazines were in it was held that the economic survival of the newspapers and news magazines, depends not only upon the price realized on the sale of each issue of the newspaper/news magazine but by other income generated by way of advertisements, as such, price realized was not relevant fact for purposes of unjust enrichment. Based on aforesaid analysis, I am of the view that the appellant has not been able to pass the rigor of section 27 and the law laid down by Apex Court in Union of India Vs. Solar Pesticides supra. In view of above, I agree with the order of Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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