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TMI Blog2017 (2) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... AT MADRAS] - Refund allowed. However, the CVD component of the excess duty is to be deducted from the total refund claim since the same has already been availed as CENVAT credit by the appellant in their manufacturing process - appeal allowed - decided partly in favor of appellant. - C/297/2005-DB - Final Order No. 20246 / 2017 - Dated:- 13-2-2017 - Shri S. S. Garg, Judicial Member And Shri V. Padmanabhan , Technical Member Mr. G. Shivadass, Advocate For the appellant Mr. Mohammed Yousuf, AR For the respondent ORDER Per V. Padmanabhan The appellant is engaged in manufacture of telecommunication equipment. During the period November 1995 to February 1996, the appellant imported through ICD Bangalore, telecommunication equipments from their principal, abroad. These equipments were meant for use in the further manufacture and for ultimate supply to the MTNL/BSNL. In respect of the consignments imported vide 8 Bills of Entry, the appellant claimed that they have paid excess customs duty. Their claim is that the foreign supplier invoiced the imported goods at the rate of US $ 115 per line of telecommunication equipment as against the contracted price of US ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire CVD paid at the time of import. He also took the view that the appellant has passed on the burden of the entire customs duty paid at the higher rate inasmuch as there is no nexus between the import price and the purchase order price negotiated with the Department of Telecommunication/ MTNL. The present appeal is filed against the impugned order. 2. The main grounds raised by the appellant are as follows: (i) Refund of Customs duty is normally governed by Section 27 of Customs Act, which clearly provides for credit of refund to the consumer welfare fund if it is not established that the importer has not passed on the burden of the higher customs duty paid. The provisional assessments ordered under the Customs Act are governed by Section 18 ibid. Section 18 was amended to include the test of unjust enrichment only in the year 2006. The imports made by the appellant are pertaining to the period November 1995 to February 1996. Since this period is much before the amendment to Section 18, the refund in respect of the excess duty paid is required to be paid to the appellant in cash without any reference to the question of unjust enrichment. (ii) The assessments du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 27. This Section specifically says that refund is to be paid in cash only subject to the doctrine of unjust enrichment. In terms of this Section, the appellant will not be entitled to refund in cash as held in the impugned order for failure to satisfy the test of unjust enrichment. Learned AR further submitted that even though the assessments were provisional during the relevant time, the refund in the present case arose not on account of finalisation of provisional assessment but for the reason that excess customs duty was paid on account of wrong invoicing by the supplier. As such, it is to be finalised under Section 27, and hence the test of unjust enrichment is to be satisfied. He also relied upon the decision of the Hon ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. vs. CCE: 2005 (181) ELT 328 (SC). 6. The dispute pertains to excess customs duty paid by the appellant at the time of import of goods during the period November 1995 to February 1996. In the Final Order of CESTAT dated 4.1.2005 in which the matter was remanded to the original authority to pass de novo orders, it has been settled that the appellant will be eligible for the refund on meri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was added to Section 18 by way of sub-section (5). If for a claim under Section 18 of the Act, if an assessee has to putforth a claim under Section 27 of the Act, there was no necessity for the parliament to introduce sub-section (2) of Section 27 of the Act by way of sub-section (5) of Section 18 of the Act. It only demonstrates Sections 18 and 27 are merely exclusive. Section 27 applies to a case of constitutional levy, illegal levy or a levy by mistake as held by the Apex Court in the case of Mafatlal Industries Ltd. v. Union of India reported in 1997 (89) E.L.T. 247 (S.C.). Section 18 does not fall within any of those claims. By way of provisional assessment, the duty is paid subject to the condition that after final assessment, he would pay any additional levy and if the payment of duty is in excess of what is actually determined, then he would be entitled to the refund. To claim refund under Section 18 of the Act, the assessee was not expected to invoke Section 27 of the Act. Refund under Section 18 of the Act is independent of refund under Section 27 of the Act. It is for this reason when the Parliament wanted to prevent unjust enrichment, they amended Section 18 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made provisionally subject to SVB clearance of the invoice values at which the appellant has undertaken imports from their principals. In fact, it is further on record that the refund claim originally filed by the appellant on 21.4.1997 was returned to them by the departmental officers with the direction to re-file it after the finalisation of the provisional assessments. In any case, it is settled law that once an assessment is provisional, it is provisional for all purposes and not necessarily provisional in respect of the particular ground considered as has been held by the Hon ble High Court of Madras in the case of Collector Central Excise vs. India Tyre Rubber Co. Ltd. reported in 1997 (94) ELT 495 (Mad.). 8. In view of the above discussions, and the settled position of law by the Hon ble Karnataka High Court, we find no justification in the rejection of the refund on the ground of unjust enrichment. Consequently, the impugned order is set aside and the appeal is allowed with the direction to consider payment of refund in cash to the appellant. However, the CVD component of the excess duty is to be deducted from the total refund claim since the same has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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