M/S. Vardhaman Acrylics Limited vs Commissioner Of Customs(Import), ...

[Arising out of Order-in- Appeal No. MUM-CUSTM-SMP-366-12-13 dtd. 28/6/2013 passed by the Commissioner of Customs (Appeals) Mumbai Zone I]

For approval and signature:

Honble Mr. P.R. Chandrasekharan, Member(Technical) Honble Mr 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? =======================================================

M/s. Vardhaman Acrylics Limited : Appellants

VS

Commissioner of Customs(Import), Mumbai : Respondent

Appearance

Shri. Aqeel Sheraji, Advocate for the Appellants Shri. A.K. Singh, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 7/1/2015 Date of decision 7/1/2015

ORDER NO.

Per : Ramesh Nair

These two appeals are against Order-in- Appeal No. MUM-CUSTM-SMP-366-12-13 dtd. 28/6/2013 passed by the Commissioner of Customs (Appeals) Mumbai Zone I, wherein Orders-in-Original Nos. 792/AC/GpVA/RG/07-08 dated 26/3/2008 and 228/08(EPCG) dated 23/5/2008 was upheld and Appeal filed by the appellant before the Commissioner (Appeals) was dismissed. The fact of the case is that the appellant filed seven bills of entry during the period 28/11/1997 to 27/2/1998 for clearance of equipment for Acrylic Fiber Plant. These bill of entry were provisionally assessed as matter was under investigation by GATT Valuation Cell, Mumbai with regard to the valuation of the imported goods therefore the Revenue has collected a Revenue deposit of 5% amounting to Rs. 96,42,224/-. The Asstt. Commissioner of Customs, GATT Valuation Cell, Mumbai by his Order-in-Original No. S/9-5-GATT/97 /GVC dated 26/10/98 held that the price is considered to be sole consideration and accepted the declared invoice price. The Order-in-Original was reviewed by the Revenue and appeal was filed before the Commissioner(Appeals), Mumbai, Revenues appeal was rejected vide Order-in-Appeal No. 01/2001/MCH dated 2/1/2001.

The department challenged the order of the Commissioner(Appeals) before the CESTAT and said appeal was rejected by this Tribunal vide order No. C-I/287/WZB/2002 dated 23/1/2002. The appellant filed writ petition No. 1149/2003 in the Mumbai High Court for the enforcement of the final order dated 23/1/2002 which was remanded by the Honble High Court to CESTAT for consideration of appeal on merit. This Tribunal vide its order No. A/465/WZB/06-C-II(CSTB) dated 8/6/2006 did not upset the order of the Commissioner(Appeals) and the Revenues appeal was rejected. The said order dated 8/6/2006 of the Tribunal was not further challenged by the Revenue therefore the same attained finality. The appellant further filed writ petition 2592/2007 before the Honble High Court for implementation of the CESTAT order dated 8/6/2006. Honble High Court vide order dated 20/12/2007 directed the Revenue to decide the case in 3 weeks on submission of the required documents by the appellant. Bills of entry were finally assessed on 20/2/2008 and appellant submitted the documents by 10/3/2008. In the matter of the refund claim of the appellant, sanctioning authority i.e. Asstt.

Commissioner of Customs, GATT, New Mumbai though admitted that the refund of revenue deposit of Rs. 96,42,224/- is due and same was sanctioned. However, the amount of refund sanctioned was credited to the consumer welfare fund invoking the provisions of unjust enrichment. The original authority contended that though the appellant have claimed that the amount of refund has been shown in the recoverable and booked under current assets in the balance sheet in the financial records and C.A. Certificate to this effect was also produced, but it was observed that under the head of balances of the deposit with government authorities as on 31/3/1999, the amount shown is Rs. 14.20 crores and balance as on 31/3/1998 is Rs. 5.85 crores from which it was inferred that the Revenue deposit with Custom authority, now claimed refund of Rs. 96,42,224/- has been included in schedule 10 of the balance sheet. It was also contended that the appellant has claimed depreciation of plant and machinery and therefore once the depreciation is claimed by the appellant it would amount to passing on the incidence to the consumers indirectly.

With these observations lower authority has concluded that appellant has failed to show that the burden has not been passed on to the consumer. Aggrieved by the said Order-in-Original dated 26/3/3008 the appellant filed appeal before the Commissioner (Appeals), who vide Order-in-Appeals dated 30/12/2008 set aside the order-in-original and directed the original authority to take note of all the evidences of ground of unjust enrichment and pass a speaking order. The said order-in-appeal dated 30/12/2008 was challenged by the Revenue before the CESTAT, the CESTAT vide order No. A/201-203/09 /CSTB/C-II dated 6/8/2009 set aside the Commissioner (Appeals) order dated 30/12/2008 and allowed the Revenues appeal by way of remand to the Commissioner (Appeals). On the remand, the Commissioner(Appeals) passed the impugned order wherein the Ld. Commissioner(Appeals) held that bar of unjust enrichment has not been successfully crossed and accordingly the appellants appeal was dismissed. Hence the appellant is before us.

2. Shri. Aqeel Sheraji, Ld. Counsel for the appellant submits that the appellant produced records, wherein amount of Revenue deposit was clearly accounted for as advances recoverable through out the period from the date of deposit of Revenue deposit till date. He further submits that they have submitted C.A. certificate to this effect. Not only C.A. certificate but also submitted basic financial records such as balance sheet, ledgers, vouchers etc., which clearly shows that the deposit of Revenue deposit was shown as amount recoverable under the head of current assets. He further submits that Ld. Commissioner (Appeals) rejected the appellants claim merely on the ground that the C.A. Certificate dated 6/5/2008 issued by Mahesh A. Mehta & Co. and another C.A. Certificate dated 22/5/2013 issued by M/s. S.S. Khotari Mehta & Co. are contrary inasmuch as in C.A. certificate dated 6/5/2008 under the head of custom duty and Revenue deposit as on 31/3/1998 indicated 0.00 whereas in the C.A. Certificate dated 22/5/2013 the Revenue deposit was shown on 31/3/1998 as Rs. 169.62 lacs. In this regard Ld Cousnel submits that there is apparent error in the C.A.

Certificate dated 6/5/2008 however there is no mistake in the books of account wherein the amount of Revenue deposit has been continuously shown through out the period under the head of balance and deposit with the government authorities in schedule 9 of the balance sheet. He submits that as far as this position is concerned there is no dispute in the books of accounts. He submits that original authority also held that merely on the basis of C.A. certificate, it can not be established that incidence of amount to be refunded has not been passed on or otherwise. Therefore, once it is established from the books of accounts that the amount has been shown under current assets as recoverable it is sufficient to hold that the incident of amount has not been passed on. Therefore, he submits that Ld. Commissioner (Appeals) gravely erred in rejecting the claim of the appellant merely on the ground that there is no inconsistency between two C.A. certificates. As regard the depreciation claimed by the appellant on the imported plant and machinery in respect of which revenue deposit was made, Ld Counsel Shri Shiraji submits that after booking the purchase of said plant and machinery in the books of account, amount of Revenue deposit was debited from plant and machinery account and booked under current assets as recoverable and thus the depreciation on the amount of revenue deposit was not claimed by the appellant.

Ld. Counsel submitted before us all the records such as balance sheet, ledgers, general vouchers in support of his above submissions.

3. On the other hand, Shri. A.K. Singh, Ld. Asst. Commissioner(A.R.) reiterates the findings of the impugned order.

4. We have carefully considered the submissions made by both the sides and perused the record available in the appeal memo filed as well as documents submitted by the Ld. Counsel at the time of hearing.

5. The Ld. Commissioner(Appeals) in the remand proceedings rejected the appeal of the appellants mainly on the ground that there is no consistency between two C.A. Certificates i.e. one dated 22/5/2013 issued by M/s. S.S. Khotari Mehta & Co. and another certificate dated 6/5/2008 issued Mahesh A. Mehta & Co. However, on the basis of all the records produced by the appellant before us such as balance sheet, ledgers, general vouchers and account for plant and machinery etc., it is very clear that the appellant has accounted for the amount of Revenue deposit under the head of loans and advances, which can also be seen from bifurcation of the total amount shown in the balance sheet. From this it is clear that the amount of Revenue deposit has not been booked by the appellant as expenditure in the profit and loss account. As regard the contention of the original authority that the appellant has claimed the depreciation, it is observed from the ledger account of plant and machinery that initially the total value of plant and machinery alongwith Revenue deposit was shown in ledger account of plant and machinery but the amount of Revenue deposit was debited from the plant and machinery account and transferred to head of balance of deposit with government authority and booked under head of loan and advances.

From this fact also it is established that the appellant has not claimed any depreciation on the amount of revenue deposit as same was not capitalized alongwith the value of plant and machinery. As regard inconsistency between two C.A. certificate pointed out by the Ld. Commissioner(Appeals) and made sole ground for rejection of the appellants claim, we are of the view that once it is established from the books of account of the appellant that the amount of Revenue deposit has been undisputedly shown as deposit with government authorities under the head of loans and advances in the balance sheet it is sufficient to conclude that the incidence of said revenue deposit has not been passed on to any other person. From the facts appearing in the books of accounts, discrepancy in the C.A. certificate is nothing but an apparent error in the C.A. certificate, therefore even without considering the C.A. certificate, only on the basis of books of account itself it can be decided whether the incidence of revenue deposit has been passed on or otherwise. This Tribunal in various judgments consistently taken view that C.A. certificate alone would not suffice for the claim of the assessee as regard the unjust enrichment.

There can be error in the C.A. certificate but books of accounts, which has been audited is concluding proof that incidence of revenue deposit has not been passed on to any other person. We are therefore of the considered view that the appellant, on the basis of record produced before, made us satisfied that incidence of revenue deposit has not been passed on to any other person. In view of the above discussions, we remand the matter to the original authority to decide the refund claim of the appellant afresh taking into consideration the books of accounts. The appellant shall submit all the records such as balance sheet, ledgers, general vouchers etc. before the adjudicating authority within 15 days from the receipt of this order and the adjudicating authority shall disposed of the matter within another 15 days from the time of submissions of documents by the appellant. The appeals are allowed by way of remand.

(Operative part pronounced in court)

P.R. Chandrasekharan Member (Technical) Ramesh Nair Member (Judicial)

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