M/S. Suvee Impex Pvt. Ltd vs Commissioner Of Customs And Service Tax ...

[Arising out of Order-in-Appeal No. 337-349/2014 dated 14/10/2014 passed by Commissioner of CUSTOMS, BANGALORE-I (Appeals). ]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

M/s. Suvee Impex Pvt. Ltd Jay Tulsi Chambers No. 101, 1st Floor, No.12, KH Road BANGALORE - 560027 KARNATAKA Appellant(s)

Versus

Commissioner of Customs and Service Tax Bangalore-cus C.R. BUILDING,QUEENS ROAD, P.B.NO. 5400, BANGALORE, - 560001 KARNATAKA Respondent(s)

Appearance:

Mr. V. M. Doiphode, Consultant V.M. DOIPHODE & CO.

285,Shahid Bhagat Singh Road, Chamber Nos. 44 & 45, 5th floor, Sucheta Niwas, MUMBAI - 400001 MH For the Appellant

Mr. Pakshi Rajan, Asst. Commissioner (AR) For the Respondent

Date of Hearing: 08/09/2015

Date of Decision: 08/09/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 21883 / 2015

Per : ARCHANA WADHWA

The appellant imported earth moving equipment parts on payment of leviable duties and they also paid additional duty of customs leviable on the same under Section 3(5) of the Customs Tariff Act. Subsequently they claimed refund of the said duty, in terms of Notification No.102/2007-Cus. dated 14.9.2007. The said Notification exempts the goods falling within the First Schedule to the Customs Tariff Act, when imported into India for subsequent sale, from the whole of the additional duty of customs leviable thereon, subject to fulfillment of certain conditions. For better appreciation, we reproduce the Notification in question.

Notification No.102/2007-Customs

New Delhi, the 14th September, 2007

Special CVD  Exemption to all goods when imported for subsequent sale

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for subsequent sale, from the whole of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act (hereinafter referred to as the said additional duty).

2.?The exemption contained in this notification shall be given effect if the following conditions are fulfilled :

(a)?the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods;

(b)?the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;

(c)?the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer;

(d)?the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be;

(e)?the importer shall, inter alia, provide copies of the following documents alongwith the refund claim :

(i) document evidencing payment of the said additional duty;

(ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed;

(iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods.

3.?The jurisdictional customs officer shall sanction the refund on satisfying himself that the conditions referred to in para 2 above, are fulfilled.

The refund claims filed by the appellant were adjudicated by the original adjudicating authority. He concluded that inasmuch as the appellant has sold the said imported goods and has also discharged VAT on the sale of the same, the condition of the Notification stand fulfilled. However, he took into consideration the Chartered Engineer certificate produced by the appellant declaring that the price at which the imported goods have been sold to the buyers does not include the component of the 4% of additional duty of customs, and which certificate shows the said amount as receivables/recoverable in the books of accounts cannot be accepted inasmuch as the said certificate is silent as to how they have arrived at the conclusion that the sale value does not include the 4% additional duty of customs. Accordingly, he rejected the refund claims in question on the ground of unjust enrichment.

2. On an appeal filed by the assessee before Commissioner (A), he adopted an altogether different ground and observed that there was another Notification No.21/2012-Cus. dated 17.3.2012 vide which the imported goods were exempted unconditionally from payment of SAD. As such the payment of SAD by the appellant and subsequent claim of refund under Notification No.102/2007-Cus. is not appropriate. He further observed that when there was an exemption of SAD, the appellant should have availed the same instead of first paying the SAD and subsequently claiming the refund.

Accordingly, he concluded that the appellant has no discretion to make payment when there was no levy of duty imposed under the provisions of law. He did not however deal with the Chartered Engineer Certificate on the issue of unjust enrichment. Accordingly, he rejected the appeal.

Hence the present appeal.

3. We have considered the submissions made by both the sides. Notification in question stands reproduced in the preceding paragraph. In terms of the said Notification, the importer, who imports the goods for the purpose of sale, is required to pay additional duty of customs and is entitled for refund of the same, subject to fulfillment of the conditions enumerated therein. In the said Notification, there is no restriction of items or goods to be imported and the same exempts all the goods falling within the First Schedule to the Customs Tariff Act, 1975. There may be another Notification No.21/2012-Cus. dated 17.3.2012 which might have exempted the goods in question from complete payment of customs duty. The said fact by itself, will not make Notification No.102/2007-Cus. as inapplicable. Inasmuch as there is nothing in the said Notification to suggest that if the imported items are otherwise exempted by any other Notification, the said Notification will not apply.

3.1 As regards the issue of unjust enrichment, our attention stands drawn to a Boards Circular being Circular No.6/2008-Cus. while clarifying on the point of unjust enrichment, it stands observed as under:

6.?Unjust enrichment :

6.1?.. However, considering the voluminous transactions and the documents involved in the cycle, from import to sale, it was felt that it would be expedient to allow the importer to submit a certificate from the statutory auditor/Chartered Accountant who certifies the annual accounts of the importer, that the burden of 4% CVD has not been passed on by the importer to the buyer and to fulfill the requirement of unjust enrichment.

6.2?In view of the above, it is clarified that the doctrine of unjust enrichment will apply to 4% CVD refunds Scheme under the said exemption notification issued in terms of Section 25(1) of the Customs Act, 1962. However, importers may produce a certificate from the statutory auditor/Chartered Accountant who certifies the importers annual financial accounts under the Companies Act or any statute, explaining how the burden of 4% CVD has not been passed on by the importer and to fulfill the requirement of unjust enrichment. In addition to the aforesaid the importer shall also make a self-declaration along with the refund claim to the effect that he has not passed on the incidence of 4% CVD to any other person.

As it is seen from the reproduced part of the Circular, a certificate by the Chartered Engineer certifying that the burden of CVD has not been passed on to the buyer and a self-declaration by the buyer is sufficient to establish that the duty burden has not been passed on and the condition of unjust enrichment will not apply. Though the original adjudicating authority has accepted the fact of said certificate on record, but he has not followed the same on the sole ground that details as to how such conclusions were arrived at by the Chartered Engineer, do not stand given in the said certificate.

3.2 First of all, we are of the view that no such details are required to be given in the Chartered Engineer certificate. Secondly, the Chartered Engineers certificate is admittedly based upon the examination of the accounts maintained by an assessee and is presumed to have been given after verification of the same. In terms of the Boards Circular also such certificate if given by the Chartered Accountant would suffice. As such, we are of the view that the objection raised by the original adjudicating authority is not sustainable. We accordingly set aside the impugned order and allow the appeal with consequential relief to the appellant.

(Order pronounced in open court)

ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

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