TaxTMI 
TaxTMI 
2008 (9) TMI 71
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng out of finalization of Provisional Assessment under section 18 of the Customs Act, 1962?" 1.1 Tax Appeal No.1713 of 2007 has been admitted and following three questions have been formulated,: (i) Whether in the facts and circumstances of the case, the Tribunal is justified in holding that the principles of unjust enrichment will not apply to the cases of finalization of provisional assessment prior to the amendment to section 18 of the Customs Act, 1962 prescribed in the provisions of Section 27(2) of the Customs Act, 1962. (ii) Whether in the facts and circumstances of the case, the Tribunal is justified in allowing the refund claim on the ground that the finalization was done prior to amendment of Section 18 of the Customs Act, 1962 effective from 13.7.2006 and, therefore, the doctrine of unjust enrichment would not be applicable? (iii) Whether in the facts and circumstances of the case, the Tribunal is justified in allowing the appeal by way of remand despite the admitted position that the respondent had not placed any evidence on record to prove that they had not passed the duty incidence on their customers?" 1.2 In Tax Appeal No. 1047 of 2008 the Appellant Assessee has....
X X X X Extracts X X X X
X X X X Extracts X X X X
....contract dated 19.01.2004. 4. After verifying the LME price at the relevant time, the final invoice No.CC8133 dated 23.04.2004 was submitted by the Appellant and the final Bill of Entry No. F-180/2003-2004 dated 22.02.2004 was submitted. On the basis of the aforesaid final invoice, the total duty payable was only Rs.1,37,13,076/-. Thus an amount of Rs.16,06,536/- became refundable to the Appellant. However, the Appellant had already availed CENVAT credit for the amount of Rs.12,38,065/- paid as additional duty of Customs (CVD) and therefore, only Rs.3,68,471/- was refundable. 5. The Adjudicating Authority vide Order-In-Original No. SRT/CUS/REF/12/2005 dated 5/5/2005 held that the respondent-assessee was entitled to refund and the refund was sanctioned, but the assessee had not discharged the burden of showing that the incidence of duty had not been passed on to the customers and therefore, the presumption of unjust enrichment stood unrebutted. The Adjudicating Authority therefore credited the sum of Rs.3,68,471/- to the Consumer Welfare Fund. 6. The matter was carried in Appeal before Commissioner (Appeals) who vide Appellate Order held that the doctrine of unjust enrichment wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mount of refund is credited to the Consumer Welfare Fund under section 27(2) of the Act. That doctrine of unjust enrichment is a just and salutary doctrine and no person is entitled to collect duty from the purchaser at one end and also seek refund of the same duty from the Revenue on the ground that such duty has been collected contrary to law. That the Court should not exercise its powers for unjustly benefiting a person. The decision in case of CCE Vs. Allied Photographic India Ltd.(2004) 4 SCC 34 cannot be made applicable as the same was rendered in context of provisions of Central Excise Act, 1944 and the Rules framed thereunder and therefore, the Tribunal had wrongly placed reliance on the said decision. That Mumbai High Court in case of Bussa Overseas & Properties Pvt. Ltd. Vs. UOI, 2003 (158) ELT 135 (Bom) is the direct decision on the point under the Act and is applicable to the issue raised in the present Appeals. That the said judgment of Mumbai High Court has been affirmed by Supreme Court as reported in 2004(164) ELT A177(SC). The learned Counsel has also placed reliance on the following decisions: [1] Union of India Vs. Solar Pesticide Pvt. Ltd. 2000 (116) ELT 401 (S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ground of principle of unjust enrichment being applicable. That Section 18 of the Act incorporates principle of unjust enrichment only with effect from amendment of 13.7.2006. That the Mumbai High Court judgments referred to by revenue cannot be considered as the same are opposed to the principles laid down by the Apex Court. 9. The learned Advocate appearing for respondent assessee in Tax Appeal No. 1713 of 2007 apart from reiterating the submissions made by the learned Advocate for the assessee, as recorded hereinbefore, submitted that Section 18 of the Act was a complete self contained code and had an overriding effect. considering the opening portion of the said section wherein it is stated : "Notwithstanding anything contained in this Act". 9.1 Referring to Explanation II to Section 27 of the Act it was submitted that the same would apply to a case where after the final assessment and the adjustment, if still the assessee is not satisfied with the adjustment and claims excess amount as refund. Explanation II will have no application in cases where admittedly after final adjustment, refund is due to the assessee. This is explained with the following illustration: Duty paid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and and B.N. Kirpal, JJ).- Significant questions concerning the refund of excise and customs duties collected contrary to law in all its shades - arise for consideration in these appeals and writ petitions. They involve the correctness of certain earlier decisions of this Court, concept of unjust enrichment, interpretation of Article 265 of the Constitution of India and of the provisions of the Central Excises and Salt Act, 1944 and the Customs Act et al. As far back as 14-8-1984, Civil Appeal No. 1794 of 1984 and the connected special leave petitions were referred to a Bench of seven Judges by a Bench of two learned Judges, since the referring Bench doubted the correctness of the five-Judge Bench decision in STO v. Kanhaiya Lal Mukundlal Saraf. When the matter came up before a seven-Judge Bench has followed the decision in Kanhaiya Lal in State of Kerala v. Aluminium Industries Ltd. Accordingly, the matters were directed to be posted before a nine-Judge Bench. Meanwhile, several matters raising identical or connected issues got tagged on. Leave granted in special leave petitions. 11. In the year 1991, Parliament enacted the Central Excises and Customs Law (Amendment) Act, 1991 (b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) reagitating the issues already decided under Rule 9B assuming that such a refund claim lies-and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation". 12. In the case of Allied Photographic the Apex Court was required to answer the question: "Whether a claim for refund after final assessment is governed by Section 11B of the Central Excise Act, 1944?" Upon a reference having been made to a Larger Bench by a two Judges Bench of the Apex Court. The points at issue have been set out in the opening part of paragraph No.6 of the judgment. For the present only the first issue is relevant, viz., whether the refund of duty paid under provisional assessment is similar to duty paid under protest as both are 'on account' payments adjustable on finalization of assessment or vacating of protest. After setting out the provisions of Section 11B of the Central Excise Act, it is stated that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ist the revenue. 15. Section 18 of the Act as is relevant for the present reads as under: "SECTION 18. Provisional assessment of duty. - (1) Notwithstanding anything contained in this Act but without prejudice to the provisions contained in section 46- (a) where the proper officer is satisfied that an importer or exporter is unable to produce any document or furnish any information necessary for the assessment of duty on the imported goods or the export goods, as the case may be; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of duty thereon; or (c) where the importer or the exporter has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems it necessary to make further enquiry for assessing the duty, the proper officer may direct that the duty leviable on such goods may, pending the production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... prejudice to the provisions contained in section 46- (a) where the proper officer is satisfied that an importer or exporter is unable to produce any document or furnish any information necessary for the assessment of duty on the imported goods or the export goods, as the case may be; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of duty thereon; or (c) where the importer or the exporter has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems it necessary to make further enquiry for assessing the duty, the proper officer may direct that the duty leviable on such goods may, pending the production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty finally assessed and the duty provisionally assessed. (2) When the duty leviable on such goods is assessed finally in accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssment order. However, sub-section (5) is the material amendment which indicates that the Proviso appearing below sub-section (2) of Section 27 of the Act has now been incorporated as a part of Section 18 of the Act. On a plain reading the distinction between Section 18 as it stood prior to amendment i.e. upto 12.7.2006 and subsequent to the amendment i.e. with effect from 13.7.2006 becomes apparent. The difference is stark and revealing and it is not possible to agree with the contention of revenue that such amendment has to be understood as clarificatory in nature. This is more so, when one reads the amendments made in 1998 and the amendment made in Rule 9B of the Central Excise Rules in 1999 considering the pronouncement of the Apex Court as to the distinction between making of a refund and claiming of a refund; the amendment cannot be considered to be retrospective in nature; and cannot be made applicable to pending proceedings. 19. This can be considered from a slightly different angle. While introducing the Taxation Laws (Amendment) Bill, 2005 (Bill No. 74 of 2005) the Notes on Clauses in relation to Section 18 of the Act indicate that sub-sections (3), (4) and (5) to Secti....