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TMI Blog2008 (5) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Customs, Nhava Sheva adjudicated the case vide Order-in-Original No. 07/95 (JNCH) dated 28-2-1995. He enhanced the value not only to US 3.78 per bulk litre but also further enhanced the same by an amount of Rs. 18,80,453/-, which was transferred to the account of the supplier, alleged by the importer. Thus the duty finally assessed by the Adjudicating Authority in the impugned Order-in-Original dated 28-2-1995 was Rs. 3,39,69,561/- as against the duty of Rs. 2,62,34,567/- deposited at the time of provisional assessment. The differential duty of Rs. 77,34,994/- was appropriated by encashing the Bank Guarantee of Rs. one crore. The remainder Rs. 22,65,006 - of the Bank Guarantee was appropriated towards the redemption fine. 3. On appeal by the appellants, the Tribunal vide the Order dated 10-9-03 partially allowed the appeal by observing that the declared value was to be accepted as the transaction value. However, the goods were liable to confiscation and it was held that the same were rightly confiscated. The Tribunal reduced the redemption fine from Rs. 22,65.006/- to Rs. 15 lakhs in this case. Thereafter, the appellants approached the Nhava Sheva Custom House for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realized by encashment thereof is not subject to unjust enrichment. The amount appropriated by encashing the Bank Guarantee was subsequent to the clearance of the goods and, therefore, bar of Unjust Enrichment was not applicable to such cases. (vi) They had made a contract of sale of the imported goods @ Rs. 900 per bulk litre before the landing of the goods. It did not depend upon the amount of duty paid by them and, therefore, in such cases it cannot be said that the differential duty charged subsequent to the contract has been passed or to the buyer. 5. The learned Joint CDR the other hand vehemently argued that the doctrine of unjust enrichment is squarely applicable to the facts of the present case. He cited plethora of judgments of the Supreme Court, High Court and the Tribunal to the buttress his argument. He also stressed that there is incontrovertible evidence on record, which shows that the amounts in question, for which the refund was claimed by the appellants, were not at all borne by the appellants right from the initial stage and these were, in fact, paid to the Customs by the buyer of the goods either directly or indirectly. He, therefore, pleaded that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Section 11B, as the case may be. "However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ petition or suit, is entertained and is allowed/decreed then any refund claim arising as consequence of the decision in such appeals or such other proceedings, as the case may be, would be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) reagitating the issues already decided under Rule 9B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11B It follows logically that position would be the same in the converse situation." 6.2 In the instant case, the refund is not flowing out of the finalization of the provisional assessment but is a consequence of an appellate order of the Tribunal. Thus, in the instant case, the refund will be governed by Section 27 ibid and the Doctrine of Unjust Enrichment is to be applied in this case. 7. We are also not inclined to accept the appellants' plea that the lower authorities erred in holding that they are not enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of hearing the learned Advocate appearing on behalf of the claimants submitted that "the entire lot was sold by the claimants to M/s. Maharashtra Distilleries Ltd. at the rate of Rs. 900 bulk litre plus Sales Tax @ 10%. As such, they have received a total consideration (including Sales Tax) of Rs. 5,65.32,980/- from M/s. Maharashtra Distilleries Ltd. They have not recovered anything above or less than the said amount." 24. The above statement on the part of the claimants appears to be factually wrong, misleading and incorrect. As admitted by the claimants the goods in question were sold by them to M/s. Maharashtra Distilleries Ltd., a subsidiary of Shaw Wallace & Co. Ltd. It is learnt that the said buyer M/s. Maharashtra Distilleries Ltd. and Shaw Wallace & Co. Ltd., have filed a suit No. 691 of 1998 against the claimants in the Mumbai High Court. In the said suit, the buyer has averred that they have made aggregate payment of Rs. 4,90,98,567/- towards the purchase of total quantity of 36,902 litres of Undenatured Ethyl alcohol, the duty paid on which has been claimed by the claimants as refund. The buyer in the said suit has even furnished the details of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the claimants, the buyer has moved a notice of motion of 2005 in the said suit No. 691 of 1998 filed by them against the claimants. In the said notice of motion the Union of India. Commissioner of Customs, JMCH, and Dy. Commissioner of Customs (SHB) have been made Respondents and order for restraining the claimants from claiming refund from any part of the said amount of Rs. one crore, of encashment of bank guarantee, are sought by the buyer from the Mumbai High Court. The buyers have also sought orders from the Mumbai High Court to refund the said amount of Rs. one crore received by the Respondents by encashment of the said bank guarantee. 29. In support of the said notice of motion moved by the buyer, they have filed an affidavit of one Sonali Chawda, Manager-Legal of Shaw Wallace & Co. Ltd. in para 8 & 9 of the said affidavit in support of the notice of motion, the buyer has stated as below :- "8. I say that the plaintiffs having reimbursed the amount of Rs. 1,00,00,000/- to Allahabad Bank in view of the indemnity dated 16th June, 1992 given by the Plaintiffs to Allahabad Bank, the Defendents are not entitled to seek refund of the said amount of Rs. 1,00,00.000/- from the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bank, as per the details given in the suit filed by them. 32. The above discussions clearly establish that the submissions made by the claimants that "the entire lot was sold by them to M/s. Maharashtra Distilleries Ltd., at the rate of Rs. 900 bulk litre plus Sales Tax @ 10%. As such, they have received a total consideration (including Sales Tax) of Rs. 3,65,32,980/- from M/s. Maharashtra Distilleries Ltd. They have not recovered anything above or less than the said amount", is factually incorrect, wrong and completely misleading, which effectively tantamounts to wilful mis-statement and suppression of facts, with an intention to obtain refund to which their not eligible in accordance with the law. 33. There is another factor also, which leads to the conclusion that the incidence of the duty paid by them was passed on to the buyer. The details of the landed costs of the materials, when the value as declared by the claimants are taken into works out as under :- Rs. @ lower Customs duly amount The total CIF value of the 22,56,017/- Add: Total Customs duty 92,28,241/- Total 1,14,84,258/- Landed Costs per Bulk Ltr for 36,902 bulk Itr. 311.21 Add: 20% towards ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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