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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 ..... ions, the price was found to be UK P.3.78 per hulk litre, and therefore, the goods were provisionally released after the payment of provisional duty of Rs. 2,62,34,567/- against the admitted duty liability of Rs. 92,28,241/-. A Bank Guarantee of Rs. one core was also furnished against the fine and penalty, which was likely to be imposed in this case. The Adjudicating Authority i.e. Commissioner 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 dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said Bank Guarantee was debited from the account of another person. (v) The bar of unjust-enrichment is not applicable for the refund of the redemption fine and the deposit of penalty, security or Bank Guarantee do not fall within the ambit of Section 27 of the Customs Act, 1962 as the said Section is applicable only for duty. The Bank Guarantee is a security and the refund of the amount 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 Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. "Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantee. Thus, even the incidence of the said amount of Rs. one crore, which was recovered by the Department by way of encashing of bank guarantee, was not borne by the appellants right from the initial stage and the same was passed on to the buyer. 9. For better appreciation of the facts, we reproduce below the relevant extracts of the Order-in-Original No. 2247/05 dated 14-12-2005 passed by the Assistant Commissioner : "23. 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 Distillerie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng their counter-guarantee. Thus, even the incidence of the said amount of Rs. one crore, which was recovered by the department by way of encashment of bank guarantee was not borne by the claimants right from the initial stage and the same was passed on to the buyer. 28. As a matter of fact consequent to passing of the order by the Tribunal and directions issued by the Mumbai High Court on 20-9-2005 in the matter of 2308 of 2005, filed by 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 Sona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litres. By taking the aggregate amount paid by the buyer and the total quantity purchased by them, per Bulk ltr sale price charged by the claimants works out to Rs. 1330.51 per litre as against the contract price of Rs. 900/- per litre, all inclusive except sales tax. Over and above the aggregate payment of Rs. 4,90,98,567/- the buyer has indirectly paid an amount of Rs. 1,00,00,000/- also by way of payment towards counter guarantee given by them to the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to obtain refund to which they are not at all legally entitled. For the reasons best known to the appellants, they did not produce the copy of the contract dated 4-3-91 inspite of asking for the same by the Assistant Commissioner at the time of the personal hearing held before him on 2-12-05. However, the copy of the said contract dated 4-3-91 was produced before us. On perusal of the same, it is observed that there is one vital clause in the said contract, which reads as under : "The above price (i.e. Rs. 900 per bulk ltre) is based on the current rate of customs duty, which is basic 355% auxiliary duty 50%. Any variation in the customs duty at the time of customs clearance will be to your (buyer's) account". It seems that in terms of this clause of the contract, the differential duty of Rs. 2.62 crores (which includes Rs. 1.70 crores claimed as refund by the appellants) was paid by the buyer and not by the appellants. 11. In the light of detail discussions as above, we are firmly of the view that the appellants have no locus standi over the amounts and if paid to them, it will be unjustly enriching them. In such circumstances, after adjustment of the redemption fine of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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