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TMI Blog2019 (9) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 - SUPREME COURT ], wherein the Hon ble Apex Court has held that if there is no change in the price post levy of duty and the Auditors certifies that the incidence of duty has not been passed to the customers, in that case, it can safely be presumed that since the duty burden has not been passed on to the customers and therefore, the question of unjust enrichment does not arise. Thus, the element of unjust enrichment are not present in the matter at hand. Fulfillment of requirement as prescribed u/s Section 28C and 28D of Customs Act, 1962 - HELD THAT:- The provision of Section 28C and 28D of Customs Act are presumptive provisions and once the importer assesse submits his claim that he has submitted the required sales invoices etc. it is on the part of the Department to establish that assessee has not passed the burden of enhanced duty on the customers. In this case we find that all the invoices, purchase and sales invoices have been submitted to the Department and Deputy Commissioner in his report dated 19 February 2018 has reported that burden of enhanced duty has been borne by the appellant and there is no element of unjust enrichment. Thus, the appellant has fulfilled this re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs, Chennai reported in 2015 (318) ELT 607 (SC) has held while interpreting a similar notification No. 06/2002-CE dated 01.03.2002 that the reduced rate of excise duty will be applicable to CVD even in respect of imported goods for the reason that no question of availing Cenvat Credit under the Cenvat Credit Rules, 2004 arise where inputs are procured from a country other than India. Thus, the condition must be considered to have been fulfilled. Consequent upon the judgement, the appellant filed above mentioned refund claims for the periods October, 2014 to 25 March, 2015 amounting to ₹ 24,69,98,215/- and April, 2015 to 17 July, 2015 amounting to ₹ 23,62,85,014/- vide their applications dated 29.09.2015 and for ₹ 1,56,24,904/- in case of M/s. Akshar Telecom (appellant No. 1) vide applications dated 27.09.2015 filed on 29.09.2015. A show cause notice dated 26.12.2015 was issued to the appellants proposing to reject the refund claims on the following grounds: (i) that firstly, the refund claims were not filed with complete details and documents and hence the submissions of both the applications on 29.09.2015 cannot be considered as valid submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a position to ascertain whether customs CVD was included in their sales invoices or not. The appellants were granted personal hearing on 11.04.2018 by the Commissioner (Appeals) who apart from arguing the case of unjust enrichment on the basis of documents produced by them and relevant case laws, further argued that as the adjudication order did not consider the issue of unjust enrichment, the same was beyond the scope of jurisdiction of the appellate authority. The Commissioner (Appeals) vide his Order-in-Appeal dated 26.07.2018 held as under: (i) The refund application filed by the appellant was proper and within the limitation period. Rejection of refund claim on the grounds that incomplete application was submitted by appellant is not sustainable; (ii) Department s denial of refund on the grounds that benefit of exemption notification No. 12/2012 is not available to appellants as intention of government while restricting the duty structure of mobile handsets in the year 2014 was to boost the domestic production and levy higher duty on imported mobile phones was held to be unsustainable. (iii) The refund claim was maintainable and there is no requirement for separate re-assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of M/s. Trust Marketing) in a similar case and on the same issue and the present case is pari materia to the refund sanctioned by the Deputy Commissioner vide his Order no. 322/2016 issued from F. No. VIII (E)/20/refund /ACC/156/2016 dated 18 April, 2017 wherein it has been held on the question of unjust enrichment that I find that the appellants contention that burden cast upon them to prove that incidence of duty was not passed on to the customers was discharged by the fact that the amount of excess tax paid, have been shown as receivable (recoverable) in their financial statement of financial year 2015-2016, this fact indicates that excess duty paid was not added to the cost of final product. Accordingly, I hold that provisions of unjust enrichment clause under section 28 of Customs Act, 1962 was not applicable to the facts of this case, hence, not invokable. As per the learned advocate, the above mentioned Refund Order has been accepted by the Department and no appeal has been filed against the same. It has further been added that the Department cannot change its stand on an issue of legal nature where the facts are peri materia to the present case. 6. The learned advocate ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logies (India) Ltd. vs. Union of India (Writ Petition (C) No. 10618 of 2016) has held that the refund claim is to be accepted and passed if the Chartered Accountant s certificate claiming that burden has not been passed on to the customers. The learned advocate has also stated that in the case of Vishal Video Appliances Pvt. Ltd. vs. Union of India reported in 2016 (341) ELT 39 (Del), the Hon ble Delhi High Court noted that the fact that appellant has produced Chartered Accountant s certificate evidencing the assessee s claim is not hit by unjust enrichment, the Hon ble Court has allowed the refund claim on the basis of Chartered Accountant s certificate filed by the appellant. 10. Similarly the learned advocate has taken the shelter of judgement of Delhi High Court in the case of Yu Televentures Pvt. Ltd. vs. Union of India reported in [2017 (358) ELT 81 (Del)] holding that the Chartered Accountant s certificate is sufficient to establish that the incidence of CVD on imports was not passed on to the customers. The learned advocate has also taken shelter of following decisions to prove his assertion. 1. Dabur India Ltd. vs. Commr. of C. Ex., Ghaziabad, 2008 (228) E.L.T. 131 (Tri. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-Kol) 13. To further substantiate the claim that sale prices of mobile phones are not linked to the CVD, the learned advocate has tried to prove by showing the price pattern which was existing before the CVD was increased from 6% to 12% saying that selling price of the goods have not been changed after the rate of CVD was increased from 6% to 12% since 01st March, 2015. The following table have been referred by the learned advocate. Model No. Import Date Customs duty rate Date of Sale Selling Price S96 [Chhattisgarh 19.1.2015 7% 24.04.2015 30.04.2015 2,429 2,429 Distributor Segment Price (Discount@ 6.5%)] 25.04.2015 13.5% 27.04.2015 06.05.2015 23.05.2015 2,429 2,429 2,429 P2 [Rajasthan Retail Distribution segment (Discount@ 6.5%)] 01.10.2014 08.04.2015 7% 13.5% 06.10.2014 06.10.2014 09.04.2015 09.04.2015 4,515 4,515 4,129 4,129 S5.5 [Chhattisgarh Retail Distribution Segment Price ([email protected]%)] 06.02.2015 31.03.2015 7% 13.5% 13.02.2015 07.04.2015 08.04.2015 16.04.2015 16.04.2015 17,296 17,296 17,296 17,296 17,296 14. The learned advocate for the appellant have also taken shelter of following case laws in support of his claim. Since price has either remained unchanged or have gon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to the consumer welfare fund. 18. We thus, find that only question which is to be answered by us is whether the appellant have crossed the bar of unjust enrichment or whether there is an element of unjust enrichment which necessitates deposit of refund amount to the consumer welfare fund or not. We find that principal of unjust enrichment refers to a equitable principal that no person should be allowed to get enriched on the expenses of others. The matter of unjust enrichment has been examined by Hon ble Apex Court as well as this Tribunal in several cases. We find that in case of Commissioner of Customs, Air Cargo Unit vs. Maruti Udyog Ltd. reported under 2003 (155) ELT 523 (Tri-Del), it has been held that whether the incidence of duty has been passed on to the consumers or not is to be adjudged on the following three criterions: (i) That duty was disclosed as amount recoverable from the customs under other current assets in the balance sheet for a particular financial year; (ii) A certificate of Chartered Accountant is produced to the effect that incidence of duty was not passed on to the customers; and (iii) The invoices for the relevant period which show that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se circumstances, as the balance sheet which is as per record under the Companies Act showing the amount as recoverable from the revenue and in view of the earlier decisions on this issue impugned, order is set aside. Appeal is allowed. 20. Similarly in case of Bajaj Auto, Pune I reported under [2017 (347) ELT 519 (Tri-Mum)], it has been held that unjust enrichment bar not applicable if the amount shown in the balance sheet as receivable from the department under section 27 of the Customs Act, 1962. The relevant extract of the judgement is reproduced as under: 8. It can be seen from the adjudication order and the impugned order that appellant is eligible for the refund as claimed by them. The only question that falls for our consideration is whether appellant has crossed the hurdle of unjust enrichment or not. It is undisputed that appellant had shown the amount claimed as refund as receivables in Balance Sheet, with a narration that this amount is due from Revenue Authorities. It is a common knowledge that when the amount is shown as receivables, it is not expensed out in the Balance Sheet, hence will not form a part of the cost of the final product manufactured. Since there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nized in the financial statements of the period in which the change occurs . 24. Thus, we find that the appellants have shown the refund amount rightly in their financial statement of Financial year 2015-2016 as recoverable/receivable under Assets category of their balance sheet because the contingent assets on this account have arisen only in financial year 2015-2016. We find that the Commissioner (Appeals) has not considered the prescribed principles of accounting while rejecting this fact. We thus feel that the appellant has correctly reflected the refund amount in their book of accounts and financial statements for financial year 2015-2016 as an assets under receivable/ recoverable category. 25. Coming to the criteria (ii) that for claiming the refund claim, Chartered Accountant certificate required to be produced by the appellants to establish that burden of duty has not been passed on to the customers and thus, bar of unjust enrichment has been met by the appellant. We find that the appellants have submitted Chartered Accountant certificates from a reputed chartered accountant firm M/s. Kotwani and Company which are dated 28.9.2015 and same has been submitted for both the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rate of CVD. We feel that there is no other evidence to contradict the findings of Chartered Accountant and, therefore, we are inclined to accept the certificate given by the Chartered Accountant. 27. We find that Hon ble High Court of Delhi in the case of Yu Televentures Pvt. Ltd vs. Union of India reported under [2017 (358) ELT 81 (Del)] has held that once the Chartered Accountant s certificate certifies that the incidence of CVD duty on import was not passed on to the customers, it is sufficient to rebut the presumption of unjust enrichment. The relevant extract of the Hon ble High Court s decision is reproduced herein below:- 26. Here it is interesting to note that the petitioner submitted the same CA certificate and documents (including sales invoices) for the aforementioned period as well as for the period June and July, 2015. Respondent No. 4 has accepted these very documents for the claim in respect of June and July, 2015. Pertinently, respondent No. 4 observes in respect of those invoices as under : I find that the sales invoices of June, 2015 and July, 2015 produced by the importer do not reflect the CVD amount separately which, prima facie, indicate that the burden o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants have not passed on the burden of CVD to the buyers or customers. It is a matter of fact, whether the incidence of duty has been passed on to the buyers or not can only be established by verification and examination of sales invoices, and other financial records of the appellants. As both Chartered Accountant s certificate as well as the Deputy Commissioner s concerned who has physically verified the financial records including sales invoices, import prices etc. and has certified that the burden of CVD has not been passed on to the buyers of goods and also certified that there is no unjust enrichment for appellant. Since both the Deputy Commissioner s report as well as Chartered Accountant s certificate categorically certify after examining and analyzing financial records, import prices and sale invoices that there is no element of unjust enrichment and the Department has not adduced any evidence to contradict such findings of the Deputy Commissioner and the Chartered Accountant, we are inclined to accept these fact finding reports as correct. 30. In this regard the Hon ble High Court of Delhi in its judgment in case of M/s Hero Motorcorp Ltd. versus Commissioner of Customs (Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lers and price to the ultimate customer in form of Retail Sale Price (RSP) has generally come down or have remained constant which prima-facie establishes that burden of enhanced CVD rate from 7% to 13.5% has not been passed on the buyer. 36. It is an established principle that Retail Sale Price comprises of all the cost components of a product, such as cost of production, + cost of distribution, + all the taxes and reasonable margin of profit. In a given situation if the R.S.P. of a product is ₹ 1000/- and if rate of tax on the same product goes up from 10% to 20% and the product manufacturer still sells the product at previous RSP of ₹ 1000/-, we understand that the burden of enhanced rate of tax has been absorbed by the manufacturer and the burden of increase in the tax component of product has not been passed down to the customer, we find a similar situation in this case. 37. In view of the above, we are of opinion that the comparative analysis of prices, in a situation of change in the tax rates, is absolutely important to decide whether the additional tax burden in situation of increase in tax rates is being shifted to the buyer or not. This also has to be the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was clearly mentioned that the sale price did not include the customs duty. (ii) that there was no change in price post-levying of the duty. Assessee had filed its price list and the customs duty was imposed thereafter. The goods were sold to the customers at the same price which was stated in the price list. (iii) That there was an auditor s certificate certifying that assessee had not passed on the customs duty to the customers. came to the conclusion that the assessee had not passed on the burden of the customs duty to its customers. This finding is a finding of fact based on evidence which does not call for any interference. 39. Similarly, this Tribunal in the case of Indian Metals Ferro Alloys vs. CCE, Bhubaneswar reported under [2001 (125)ELT 943 (Tri)] has held that invoices are normally the best evidence to show whether or not the burden of duty has been passed on by the manufacturers to his customers and if the invoices does not show any element of duty being recovered from the customers, in that case, it can safely be concluded that there is no element of unjust enrichment. The relevant extract of the decision in the case of M/s. Indian Metals and Ferro Alloys (supra) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Ltd. versus Commissioner of Central Excise, Cochin reported in 2003 (151) E.L.T. 136 (Tri. Del.). The relevant extract of same is reproduced here below:- 18. It is well settled that the incidence of duty cannot be said to have been passed on by the consumers, if the sale price of the goods had remained the same before and after payment of duty by the assessee. In this context, reference may be made to, Commissioner of Central Excise, Kanpur v. Corona Cosmetics Chemicals (P) Ltd. - 2000 (118) E.L.T. 356 (T) and Commissioner of Central Excise v. Minerva Mills - 2002 (141) E.L.T. 177, wherein it has been so ruled by the Tribunal. The Revenue had not produced any evidence to contradict the documentary evidence produced by the appellants referred to above. Therefore, the unrebutted evidence of the appellants that their selling price of the final product was not influenced by payment of duty on the inputs during the period in question and that the price remained the same or even on certain occasions stood reduced, deserves to be accepted. From all this evidence brought on record, it stands amply proved that the incidence of duty had not been passed on by the appellants to the buyers/co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded 20% element of duty in addition to the purchase price without passing on the burden to its dealers. From the record it appears that during the disputed period 1974 to 1984, M/s. AGIL was in trading which further supports the above improbability. In the present case, there is no material placed on record by M/s. AGIL as to how it had accounted for the cost of purchase in its books and the accounting treatment it gave to the said item at the time of payment of the purchase price. No record as to costing of that item has been produced. This material was relevant as in the present case NIIL conceded that it had passed on the burden of duty to its distributor M/s. AGIL (buyer) and it was the buyer who claimed refund. It has been urged on behalf of the respondent and which argument has been accepted by the authorities below that 20% of the total price paid by M/s. AGIL to NIIL represented total excess excise duty levied and not the excess duty collected by NIIL in the form of sale price from its distributor M/s. NIIL. It was argued that excess duty collected by NIIL represented only 1.62% of the total price. It was argued that resale price charged by M/s. AGIL to its dealers had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment does not lead to the inevitable conclusion that incidence of duty has not been passed on to the buyer as such uniformity may be due to various factors. Hence, even on merits, the respondent has failed to make out a case for refund. Since relevant factors stated above have not been examined by the authorities below, we do not find merit in the contention of the respondent that this Court should not interfere under Article 136 of the Constitution in view of the concurrent finding of fact. (Emphasis supplied) 15. The Supreme Court noticed that the assessee at the earlier proceedings had conceded before the High Court that it had passed on the duty burden to its distributor and the only question was whether the distributer had passed on the duty burden to the dealers. It was therefore observed that it was highly improbable that the distributor had borne the duty burden or element of 20% which was already included in the purchase price of the distributor. The period in question was a decade long between 1974 to 1984. It was therefore, highly improbable that the distributor would have paid and borne the entire duty burden for the said period. It was further observed that no materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has been passed on to the buyers of the finished products or has been borne by the importer himself. Difficulty in proving that the incidence of the duty borne by the importer has not been passed on to the purchaser of the finished product can be no ground for interpreting Section 27 differently. It is not possible that in no case will an importer not be able to prove that the incidence of the duty imposed on the imported raw material has not been passed on to any other person. In fact in Civil Appeal No. 4381 of 1999 filed by the Commissioner of Customs against M/s. Surya Roshini Limited, the importer had produced certificate from the Chartered Accountants giving details of costing of the final product and the Commissioner (Appeals) found as a fact that the component of excess customs duty paid on the imported raw material had not gone into the costing of the finished product. Without going into the correctness of this finding we wish to emphasize that even in cases of captive consumption, it should be possible for the importer to show and prove before the authorities concerned that the incidence of duty on the raw material, in respect of which refund is claimed, has not been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t doubted. Thus the Commissioner (Appeals) should not have upheld the bar of unjust enrichment in the present case. (b) The Commissioner (Appeals) can t question the authenticity of sale invoiced by asking the appellants to substantiate the price quotation for the period prior to and after the sale. (c) It was for the Department to have brought on record evidence to prove the case of unjust enrichment burden passed on. The sale price and costing of the goods as submitted by the appellant that has not been questioned by both the authorities below. Therefore non-filing of IT returns and of Balancesheet to the Commissioner (Appeals) are issued not germane and are irrelevant for considering the question of unjust enrichment the sale of imported goods been made by the importer. The cost of goods is a pure question of fact and profit and loss are to be determined consequently to the cost of the goods of import duties, especially on enhanced value would be a important component of costs. (d) Since the presumption raised by Sec. 28D of the Customs Act, 1962 is a rebuttable presumption of law and not conclusive merely because the documents of sale are not as per the provision of Section 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment has accepted the certificates issued from same Chartered Accountant, to allow another refund of the claimant, there was no valid reason to deny the claim of same assessee in another case. The relevant extract of the above decision is reproduced below: 24. It has been explained by learned counsel for the petitioner that no refund claim had yet been made in respect of the aforementioned B/Es during the financial year which ended on 31st March, 2015. Since the refund applications were submitted only during FY 2015-16, the outstanding refund in respect of these four B/Es could not have been shown in the balance sheet for FY 2014-15. Indeed, the mere fact that this amount was not shown as outstanding during the year 2014-15 would not mean that the petitioner is not entitled to claim refund. The petitioner cannot possibly be denied refund if it, in fact, did not pass on the burden of CVD to its customers. 25. What respondent No. 4 had to examine was whether the claim of the petitioner that it had not passed on the incidence of CVD in respect of the above B/Es for 27th March, 2015 to 31st March, 2015 to the customer was supported by proper documentation. 26. Here it is interesting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Intex Technologies (India) Ltd., in writ petition No. 10618/2016, Hon ble High Court of Delhi by order dated 08.11.2016 (unreported), was again considering identical issue and one of the point which came before their Lordships is regarding refund claim in light of the decision of the Apex Court. Their Lordships in paragraph No. 6 of the order held as under: 6. In the light of the law laid down by the Supreme Court in SRF Ltd., (supra) the Court is of the opinion that the claim in these proceedings has to succeed. A direction is issued to the respondents to process the petitioner s refund claim and pass appropriate orders having regard to the fact the petitioner had filed supporting certificates in the form of a Chartered Accountant s clarification/certificate etc. claiming that the benefit sought was not passed on to the customers. The respondents are further directed to pay the appropriate refund amount together with interest applicable till date of actual payment within three weeks from today. The said order of the Hon ble High Court was carried in SLP before the Apex Court, the Apex Court dismissed the SLP by order dated 07.07.2017. 14. Revenue Authorities were still no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year ended 31 March, 2016 as amount recoverable from the Customs. Accordingly, I hold that the provisions of unjust enrichment clause under Section 28D read with Section 27 of the Customs Act, 1962 are not applicable to the facts of this case and hence not invocable. 27. By the same yardstick, there was no reason whatsoever for respondent No. 4 not to accept the very same documents in respect of the imports between 27th March, 2015 and 31st March, 2015. The certificate of the CA is categorical that the incidence of CVD, even in respect of these imports, had not been passed on to the customers. Consequently, there was no valid justification for respondent No. 4 to have denied the refund claim. 15. It is noticed that identical/similar issue came up before the Hon ble High Court of Karnataka in writ petition No. 45551- 45554/2016, which was disposed of the writ petition directing Revenue Authorities to sanction the refund, by holding that refund is eligible for granted to them. 16. Hon ble High Court of Madras in the case of Micromax Informatics in writ petition No. 3486/2016 by order dated 18.04.2017 on identical set of facts held that refund is admissible. 17. On the face o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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