TaxTMI 
TaxTMI 
2011 (3) TMI 1316
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....a) Ltd. Rs. 2,58,627/-. 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 The APFPEC Act was repealed w.e.f. 1-6-2006.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 v. UOI [2000 (116) E.L.T. 401 (S.C.)], 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 r....
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....ey have passed the ship's rail at the named port of shipment; and (ii) Where applicable, the costs of customs formalities necessary for 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on seller's account on the ground that the contracts submitted had been dated prior to 1-6-2006 when the APFPEC Act was repealed.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 seve....
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.... it was necessary for the court to ascertain that tax burden had been shifted by the assessee and it was for the Department to establish that the tax burden had been shifted by the assessee to the customers.    It is submitted that in the case on hand this requirement was not met by the Department. (d) Hind Agro Industries Ltd. v. CC [2008 (221) E.L.T. 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 v. Trivandrum Rubber Works Ltd. [1999 (106) E.L.T. 9 (S.C.)], service of demand notice on CHA was not a valid service on the asses....
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....e Customs Act, the provisions applicable to duty of customs should not be applied to claim for refund of cess under APFPEC Act repealed w.e.f. 1-6-2006. (o) The impugned order wrongly ignored the submission relying on Article 265 of the Constitution which mandated that no tax shall be levied or collected except by authority of law. (p) The amounts collected without authority of law are to be refunded and cannot be retained with the Department. (q) The Commissioner (Appeals) had not appreciated the law of agency. An agent acted on behalf of principal and the acts of the agents were binding on the principal. It was erroneously held that the appellant had not produced evidence of having paid the agents the amounts of cess paid 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 v. State of Haryana [AIR 1980 SC 1037]. The impugned order was therefore bad in law. (s) Reliance is also placed on the decisio....
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....y virtue of sub-section (3) of Section 3 of the said Act which had made, inter alia, provisions relating to refunds in the Customs Act applicable to levy and collection of cess under the APFPEC Act. The Tribunal also observed that the Supreme Court in the case of Mafatlal Industries Ltd. v. UOI [1997 (89) E.L.T. 247 (S.C.)] had held that Section 27 of the Customs Act contained machinery for refund of amount wrongly collected and the same had to be refunded within the provisions of Act. (c) In the case of CCE, Hyderabad-III v. Kumar Metallurgical Corporation Ltd. [2008 (221) E.L.T. 519 (Tri. - Bang.)], it was held that duty element shown in invoice did not mean that the duty was passed on to the buyer. When excess duty was not payable on the goods involved, contracted price did not include the duty. The respondent M/s. Kumar Metallurgical Corporation Ltd. was held eligible for refund and unjust enrichment was held to be not involved. 6.5 In the appeal filed M/s. Shivnath 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....
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....msp; When the whole or part of the duty incurred on import of raw material was passed on to another person then the application for refund of such duty would not be allowed under Section 27(1). (c) Allied Photographics India Ltd. [2004 (166) E.L.T. 3 (S.C.)]   Uniformity in prices before and after assessment did not lead to inevitable conclusion that incidence of duty had not been passed on to buyer as such uniformity may be due to various factors. (d) Sahakari Khand Udyog Mandal Ltd. [2005 (181) E.L.T. 328 (S.C.)]   The Apex Court held that before claiming a refund, the appellant has to show that he had paid the amount for which relief was sought and he had not passed on the burden to the consumer and if such relief is not granted, he would suffer loss. Doctrine of unjust enrichment based on equity could be invoked to deny the benefit of which a person is not otherwise entitled irrespective of applicability of Section 11B of Central Excise Act, 1944. (e) Gujarat Co.-op....
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.... disputed claims for refund were hit by the principle of unjust enrichment. We find that the definition relied on by Commissioner (Appeals) reads as under :- "the seller delivers when the goods pass the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term can be used only for sea or inland waterway transport. B. The seller's obligation. A6. Division of costs: The seller must, subject to the provisions of B6, pay (iii) All costs relating to the goods until such time as they have passed the ship's rail at the named port of shipment; and (iv) Where applicable, the costs of customs formalities necessary for export as well as all duties, taxes and other charges payable upon export." 8.1 We find that from the above definition it is not possible to arrive at a definite conclusion that the FOB value includes the cess paid on export of rice especially in cases where the contract with the foreign buyer specifically provided that the export duty/taxe....
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....in the interests of general public. 38. ................. 39.  ................. 40.  ................. 42.  ................. 43. The law laid down in Orient Paper Mills Ltd. and Amar Nath Om Prakash was quoted with approval by this Court in Mafatlal Industries Ltd. 44. In M/s. Shiv Shankar Dal Mills v. State of Haryana, (1980) 2 see 437, market fee was collected under the provision which was struck down by this Court in an earlier case. A prayer was, therefore, made by the traders to refund the amount collected from them. This Court held that though collection of market fee from the traders was illegal but traders could demand only such amount that had not passed on to the customers. For that view, the Court referred to Articles 38 and 39 of the Constitution as also discretionary nature of the power under Article 226 of the Constitution. Following Nawabganj Sugar Mills Co. Ltd. v. Union of India, (1976) 1 SCC 120 : (1976) 1 SCR 803, the Court devised a scheme providing for refund of amounts to those from whom illegal collections had been made by traders. 45. In Mafatlal Industries Ltd. also, this Court held that refund of ta....
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....perative that the assessee establishes that the relief sought was not passed on to others to qualify for the refund. 10. In the Priya Blue Industries case (supra), the Apex Court made the following observations on refund of excess duty paid pursuant to an order of assessment under Section 27 :- 6. We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India)'s case (supra). Once an Order of Assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an Appeal that Order stands. So long as the Order of Assessment stands the duty would be payable as per that Order of Assessment. A refund claim is not an Appeal proceeding. The Officer considering a refund claim cannot sit in Appeal over an assessment made by a competent Officer. The Officer considering the refund claim cannot also review an assessment order. The mandate handed down by the Apex Court is that no refund can be allowed in the absence of successful challenge to a completed order of assessment. 11. In all the cases of refund involved in the impugned order,....
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....s as follows :- "3. Duties of Customs on Scheduled products. - (1) There shall be levied and collected by way of a cess for the purposes of the Agricultural and Processed Food Products Export Development Authority Act, 1985, a duty of customs at such rate not exceeding three per cent ad valorem as the Central Government may, by notification in the Official Gazette, specify, on all Scheduled products, which are exported. (2) The duties of customs levied under sub-section (1) on the Scheduled products shall be in addition to any cess or duty leviable on such Scheduled products under any other law for the time being in force. (3) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder including those relating to refunds and exemptions from duty, shall, as far as may be, apply in relation to the levy and collection of the duty of customs leviable under sub-section (1) as they apply in relation to the levy and collection of duties of customs under that Act or those rules and regulations." There is no dispute that provisions in the Act pertaining to levy, collection, refund, etc., apply to levy, collection, refund....