Commissioner Of Customs (Import), ... vs M/S Tata Elxsi (India) Ltd

[Arising out of Order-in-Appeal No. 107/2004-MCH dated 02.04.2004 passed by the Commissioner of Customs (Appeals), New Custom House, Mumbai].

For approval and signature:

Honble Shri P.S. Pruthi, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy : Seen of the order?

4. Whether order is to be circulated to the Departmental : Yes authorities? ======================================================

Commissioner of Customs (Import), Mumbai Appellant

Vs.

M/s Tata Elxsi (India) Ltd. Respondent

Appearance: Mr. D. K. Sinha, A. C. (AR) for Appellant

None for Respondent

CORAM: Honble Shri P.S. Pruthi, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial)

Date of Hearing: 28.08.2015

Date of Decision: 28.08.2015

ORDER NO.

Per : Ramesh Nair

This appeal is preferred by the revenue against Order-in-Appeal No. 107/2004-MCH dated 02.04.2004, wherein the Ld. Commissioner (Appeals) upheld the Order-in-Original by which the refund was sanctioned and rejected the departments appeal.

2. The issue involved in the present case is the applicability of doctrine of unjust enrichment to the case where the refund arises out of the finalisation of the provisional assessment or/and the duty was paid under protest.

3. Shri D. K. Sinha, Ld. A.C. (AR). appeared on the behalf of the Revenue submits that the Ld. Commissioner has allowed the appeal holding that since the duty was paid under protest, the refund of the said duty is not hit by unjust enrichment relying on the Honble Supreme Court judgment in the case of Sinkhai Synthetic & Chemicals Pvt. Ltd. Vs. C.C.E., Aurangabad  2002 (143) ELT 17 (SC). He submits that in the present case the duty was paid in respect of the goods imported under Project Import Regulations, 1986 and after reconsideration the assessment was finalised by the department. The assessment was not provisional on account of some classification dispute or otherwise but the scheme of the project import is such that all such assessments have to remain provisional till the project is completed. He further submits that the Apex Court has held in the case of Mafatlal Industries Ltd. Vs. Union of India  1997 (89) ELT 247 (SC) that all claims for refund except where levy is held to be unconstitutional, to be preferred and adjudicated upon under Sec. 11B of the Central Excise Act, 1944 or under Sec. 27 of Customs Act, 1962 and subject to claimant establishing that burden of duty has not been passed on to any other person.

4. None appeared on behalf on the respondent despite notice, we therefore proceed to decide the matter on merit. After careful consideration of the records and submission made by Ld. AR., we find that Ld. Commissioner (Appeals) has held that unjust enrichment is not applicable because the duty was paid under protest taking the support of the Apex Court judgment in the case of Sinkhai Synthetic & Chemicals Pvt. Ltd. Vs. C.C.E., Aurangabad  2002 (143) ELT 17 (SC). We observed that due to the conflicting views in the benches of Honble Supreme Court on this issue, the matter was referred to the Larger Bench and the Larger Bench of Honble Supreme Court overruled the case of Sinkhai Synthetic & Chemicals Pvt. Ltd., in the case of C.C.E., Mumbai-II Vs. Alied Photography Ind. Pvt. Ltd.  2004 (166) ELT 3 (SC). In the view of this judgment and also considering the case of Mafatlal Industries Ltd. (Supra), we are the view that in the present case where even the duty was paid either under provisional assessment or under protest, the provision of unjust enrichment as provided under Sec. 27 of Customs Act, 1962 is clearly applicable. However, since the lower authority has decided the matter on the law point, the fact that whether the duty was passed on to any other person was not examined.

4.1 We, therefore, remand the matter to the adjudicating authority only for the limited purpose of verification whether the incidence of duty for which refund is sought for, has not been passed on. On verification, if it is found that the incidence of duty has not been passed on, the respondent shall be entitle for the refund. Needless to say, the adjudicating authority shall grant the personal hearing to the respondent and there after shall pass a speaking order.

(Dictated in Court)

(P.S. Pruthi) (Ramesh Nair) Member (Technical) Member (Judicial)

Saifi

2 Appeal No. C/639/04