TaxTMI 
TaxTMI 
2011 (1) TMI 876
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....- 2. The common facts of the appeals are that appellants are exporters of rice and had paid cess of 0.5% ad valorem under Agricultural and Processed Food Products Export Cess Act, 1985 (APFPEC Act) on export of consignments of rice. The impugned exports had taken place in June, 2006. The APFPEC Act was repealed w.e.f. 1/6/2006. Under separate orders, the refund claims filed by agents of the exporters for cess paid were sanctioned by the original authority in terms of Section 27 of the Customs Act, 1962 (the Act). The Department challenged the orders of the original authority before the Commissioner(Appeals). It was submitted that the original authority had erred in holding that the principles of unjust enrichment did not apply to the impugned claims. Citing the judgment of the Apex court in the case of Solar Pesticides Vs. UOI [2000(166) ELT 401 (SC)], it was argued that the principle was attracted in all cases where incidence of duty had been passed on directly or indirectly to another person. As entered in the respective shipping bills, the FOB value realized by the exporter and reflected in the bank realization certificates, the FOB value realized was inclusive of the cess in....
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....r export as well as all duties, taxes and other charges payable upon export." Therefore, the FOB price is inclusive of all costs to the seller and his profit/loss margin, if any, till the goods have passed the ship's rail at the named port of shipment. 5.The Commissioner(Appeals) rejected the claim of M/s. ITC, one of the appellants, that their contract specified that export duties, taxes, levies present and future in the country of origin were on seller#s account on the ground that the contracts submitted had been dated prior to 01/6/2006 when the APFPEC Act was repealed. He found that the FOB value in the shipping bill was inclusive of cess as entered in the shipping bill. All the exporters had failed to establish that they had compensated their buyers to the extent of cess amounts recovered. Realisation of full FOB value itself proved that incidence of cess had been passed on to the buyers. He set aside the impugned orders and allowed the appeals filed by the Department. 6. Appellants have raised several grounds seeking to vacate the impugned order. 6.1. M/s. Al Gyas Exports Pvt. Ltd. has submitted that the provisions of the Act relating to review and appeal were not....
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....Ltd. Vs. CC [2008(221) ELT 336 (Del.)] In this case, the Delhi High Court vacated an order of the Tribunal sustaining rejection of claims for refund of cess on meat products erroneously paid by the appellants therein as barred by limitation. The court held that there was no question of processing a claim for refund of erroneously paid cess in terms of the Customs Act. The High Court ordered grant of refund along with interest. 6.2. In the appeals filed by M/s. ITC Ltd., the following grounds are raised:- a. Notice for recovery of the refund already sanctioned was issued only to the CHA. As per several judicial authorities for instance CC Vs. Trivandrum Rubber Works Ltd. [1999(106) ELT 9 (SC)], service of demand notice on CHA was not a valid service on the assessee. b. The Department had collected the disputed cess without the authority of law. c. The effect of repeal of APFPEC Act is as if the said act never existed. d. The cess collected from the appellant was liable to be refunded. e. The impugned order had been passed on conjectures. f. The Revenue had filed only one appeal in the case of the assessee instead of seven as there were seven Orders-in-O....
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....id by them. r. It was against Dharma for the public authorities to retain people#s money after discovering that the same amounted to erroneous levy as held by the Apex Court in the case of Shiv Shankar Dal Mills Vs. State of Haryana [AIR 1980 SC 1037]. The impugned order was therefore bad in law. s. Reliance is also placed on the decision in Embarkation Headquarters Vs. Collector [1985(20) ELT 53 (T)] and HMM Ltd. Vs. Administrator, Bangalore City Corporation [1997(91) ELT 27 (SC)] which held that refund was not deniable when the realization of tax or money was held to be without authority of law. t. As held in CCE Vs. Pawan Tyres Private Ltd. [2000(126) ELT 1061 (T)], when the invoice showed composite price and duty was not indicated separately, the incidence of duty was not passed on to the buyers. 6.3. In the written submissions dt. 19/01/2011 furnished subsequent to hearing, it is submitted that the argument of Revenue that the appellants had to challenge the assessment to claim refund was bereft of merit because there was no valid and legal assessment but an electronic shipping bill clearance through a machine-interface and let exports were allowed only after cess ....
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....hivnath Rai Harnarain (India) Ltd., the appellant relied on its contract with the buyer which provided that the seller unconditionally guaranteed that all the necessary and required export licenses and taxes, present and future were to seller#s account and that the FOB value did not include cess. Therefore, no unjust enrichment entailed in granting the impugned refund. The retention of amount collected without the authority of law was contrary to Article 265 of the Constitution of India. They relied on the judgment of the Supreme Court in the case of D. Cawasji & Co. Vs. State of Mysore [1978(2) ELT (J 154) SC] where it was held that tax paid under mistake of law had to be refunded irrespective of the time when tax had been paid provided the writ petition or the suit for the purpose was filed within three years from the discovery of the mistake. Refund could not be rejected on the ground of unjust enrichment. In the case of Calcutta Paper Mills Manufacturing Co. Vs. CEGAT & Others [1986(25) ELT 939 (Cal.)], it was held that the ground of unjust enrichment as a defence against the claim of restitution had been rejected by the various High Courts and the Supreme Court on the groun....
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....n pursuance of assessment though incorrect. f. Rice India [2009(237) ELT 50 (Tri. Mum.)] Sugar cess was held not leviable on imported sugar and hence refund claim filed in respect of sugar cess so paid. As Sugar Cess Act itself was not declared unconstitutional, refund claim had to pass the test of unjust enrichment. g. LMJ International Ltd. [2004(178) ELT 643 (Tri. Kol.)] Refund claim pertaining to cess under Agricultural Produce Cess Act, 1940 also governed by the Customs Act, 1962. Appellants claim that refund claim not governed by Section 27 rejected. h. Microland Ltd. [2006(206) ELT 262 (Tri. Bang.)] The Tribunal held that every refund has to be examined from unjust enrichment point at all time from the date of amending provisions relating to refund under the Customs Act. i. Modipon Fibre Co. [2004(173) ELT 168 (Tri. Del.)] The Tribunal held that the assessee cannot be allowed gains from Government and customers. j. Priya Blue Industries [2004(172) ELT 145 (SC)] The Supreme Court held that without assessment order having been modified in appeal or reviewed, a claim for refund cannot be maintained. Ld. Jt.CDR also placed relied on para 13....
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....me allowed under the Act. 9. We find that in the Sahakari Khand Udyog Mandal Ltd. case (supra), the Apex Court made the following observations:- 31.?Stated simply, "Unjust enrichment" means retention of a benefit by a person that is unjust or inequitable. "Unjust enrichment" occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. 32.?The doctrine of "unjust enrichment", therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of "unjust enrichment" arises where retention of a benefit is considered contrary to justice or against equity. 33.?The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution. 34.?.. . . 35. .. . 36.?The above principle has been accepted in India. This Court in several cases has applied the doctrine of unjust enrichment. 37.?In Orient Paper Mills Ltd. v. State of Orissa, (1962) 1 SCR 549, this Court did not grant refund to a dealer since he had already passed on the burden to the purchaser. It was ....
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....s from consumers and also paid to the State Governments. In certain cases, interim relief was obtained by the appellants from this Court against recovery of tax and as alleged by the State Governments, the appellants continued to charge tax from consumers/customers. 47. .. 48.?From the above discussion, it is clear that the doctrine of #unjust enrichment# is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. The above observations made by a three Member Bench of the Apex Court make it clear beyond doubt that even in the absence of s....
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....assessment for exported goods the next issue for consideration is whether the ratio of the Hon'ble Supreme Court in the case of M/s. Priya Blue will only apply to assessment in relation to imported goods and also to exported goods. There is no warrant to restrict the application of the ratio of the Hon'ble Supreme Court only in respect of imported goods as the issues like assessment, refund are common in respect of both imported goods as well as exported good." 12. As regards the objection raised by M/s. ITC Ltd. that the Department had filed only one appeal instead of six considering the orders-in-Original (including one corrigendum), we note that the Act does not bar a person aggrieved by a number of decisions of an officer of Customs lower in rank than a Commissioner of Customs filing a single appeal to the Commissioner(Appeals). We note that the challenge to the impugned order raised by M/s. ITC Ltd. on the ground mentioned at "a" of para 6.2 above is met by the submission by the appellant at "q" of the same sub-para. As regards the challenge raised by M/s. Al Gyas Exports Pvt. Ltd. that the APFPEC Act did not adopt provisions in the Act covering review, appeal etc. of....