TaxTMI 
TaxTMI 
2009 (2) TMI 100
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....ablish that duty liability has not been passed on to the buyers as required under Section 27 of the Customs Act 1962. The Commissioner (Appeals) allowed the appeal filed by the respondents holding that refund is arising as a consequence of finalization of provisional assessment order passed by the Assistant Commissioner relying upon the decision of the Tribunal in Tecil Chemicals and Hydro Power Ltd. v. CCE, Cochin and in the case of Oriental Exports v. Commr. of Customs New Delhi [2001 (127) E.L.T. 578 (Tri. Del.)] and also the decision of the Apex Court in Mafatlal Industries case. The Revenue filed appeal against this decision of the Commissioner (Appeals) and matter has been referred to Larger Bench. 3. Shri S.R. Prasad, Ld. SDR on behalf of the appellants made detailed submissions, as under :- The matter was adjourned earlier to await the decision of Hon'ble High Court of Gujarat in an appeal on the same issue was pending and the decision has now come against the Revenue and reported in 2008 (231) E.L.T. 36 (Guj.) but reliance cannot be placed on the decision of the Hon'ble Gujarat High Court in Hindalco industries case [2008 (231) E.L.T. 36 (Guj.)] since it has not disc....
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....e.f. 1-8-98). Even in a Central Excise case, TVS case was rightly distinguished in case of Standard Drum by Hon'ble Bombay High Court (Para 29 of order). (g) In Allied Photographic's case also the period considered/examined by Apex Court was 1974-1984 i.e. prior to amendment of Section 11B and Rule 9B and therefore the "making of refund" and "Claiming of refund" were taken differently. (h) Prior to amendment, Section 11B and Rule 9B were not pari materia with Sections 27/18 of Customs, inasmuch as the lacuna found in Central Excise law was not there in Customs law. Hence the decision of Allied Photographics case is not applicable to Customs cases. This case was also therefore rightly distinguished in the case of Standard Drum case (Para 30). (i) Hon'ble Bombay High Court had though not considered the case of Allied Photographics as it was not available then, yet had considered duly the judgments of TVS Suzuki and Mafatlal Inds., which were relied upon in the case of Allied Photographics. Bussa Overseas case represents correct interpretation of the provisions of Customs Act in this regard as it has clearly and correctly distinguished the provisions of Central Excise law as ....
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....Section 11B(1)(B)(e) "in the case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof". He submits that Hon'ble Supreme Court in CCE Mumbai v. Allied Photographics India Ltd. case [2004 (166) E.L.T. 3 (S.C.)] after considering the fact that before amendment in 1991, the Proviso related to provisional assessment existed in Section 11B and after considering the provisions of Section 11B and Rule 9B provided for suo motu payment of refund on finalization of assessment by the assessing officer, whereas Section 11B dealt with claiming of refund by the person who has paid duty. He submits that the Hon'ble Gujarat High Court did not consider the decision of Mumbai High Court in Bussa Overseas and Properties Pvt. Ltd. since it was rendered before the decision of the Apex Court in Allied Photographics case. In Allied Photographics case, the Supreme Court had considered the situation where the provisions of Rule 9B of the Act and Section 11B of the Excise Act were similar to the provisions of Section 18 and Section 27 of the Customs Act 1962. In view of the above position, he submits the de....
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....of duty after the final assessment thereof. Rule 9B during the relevant time also provided that the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally assessed fell short of, or in excess of duty finally assessed, the assessee shall be required to pay or be entitled to refund as the case may be. When Section 11B was amended in 1991 and provision relating to unjust enrichment was introduced, the clause relating to provisional assessment as regards relevant date in Section 11B was omitted. It was re-introduced in 1-8-1998 in Section 11B and the Proviso providing that the refund relating to finalization of provisional assessment shall not be made except in accordance with the procedure under section 11B was introduced in Rule 9B on 25-6-99. 7.2 All the decisions of the Apex Court relating to unjust enrichment cited by both the sides i.e. Mafatlal Industries, Allied Photographics, Sahkari Khand Udyog Mandal, are related to the period prior to the year 1998. The observations of the Apex Court in respect of the refund claims in allied Photographics in Para 7 is reproduced below :- 7. Before analysing Section 11B, it is impo....
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....er was required to make the refund suo motu, there was a need for making a refund claim under Section 11B. Since this decision was not considered by the Hon'ble Bombay High Court in Bussa Overseas case, we see considerable force in the arguments advanced by the Ld. Advocate for the respondents that even when Section 27 had the provisions relating to provisional assessment, prior to the period when Section 18 was not amended i.e. prior to 2006 to incorporate the provisions of unjust enrichment, the provisions relating to unjust enrichment would not apply unless refund arises after the process of finalisation and adjustment of duty assessed is completed. 7.4 In the case of Section 18 and Section 27, the provisions relating to provisional assessment were always there in Section 27 and Section 18 was amended only in 2006. The Hon'ble Gujarat High Court in Hindalco case considered this issue in detail. The observations of the Hon'ble Gujarat High Court as regards Section 18 prior to the amendment and after the amendment in Para 16 and 18 of the judgment are very relevant and therefore are reproduced below :- "16. On a plain reading it becomes apparent that the said section overrid....
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....Apex Court as to the distinction between making of the refund and claim of the refund. Therefore, the High Court came to the conclusion that when provisional assessment is finalized, the assessee is entitled to refund and he does not have to make the claim. Therefore, the provisions of Section 27 is not attracted. 7.5 Another point that goes in favour of the respondent is that unlike Rule 9B which is a part of subordinate legislation and therefore cannot be preferred to Section 11B which is part of the main act, Section 18 and Section 27 are part of the Customs Act and neither is subordinate to other. Therefore, Hon'ble High Court observed that provisions of Section 27 cannot be read into Section 18 of Customs Act, 1962. 7.6 Another point argued by the Ld. SDR is that Hon'ble Gujarat High Court had not considered and discussed the decision of Mumbai High Court in Bussa Overseas case. In view of the fact that judgment of the Hon'ble Supreme Court in Allied Photographic case was rendered later and not considered by the Mumbai High Court and also in view of the fact that the Hon'ble Gujarat High Court has analyzed the provisions of Section 18 and Section 27 in detail and also ha....