BHARAT PETROLEUM CORPORATION LTD. Vs. C.C. (IMPORT)
LAWS(CE)-2015-1-136
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 01,2015

BHARAT PETROLEUM CORPORATION LTD. Appellant
VERSUS
C.C. (Import) Respondents




JUDGEMENT

P.R.CHANDRASEKHARAN - (1.)THERE are 3 appeals arising from Order -in -Appeal Nos. 229 -231/MCH/AC/Oil Unit/2013, dated 21 -3 -2013 passed by the Commissioner of Customs (Appeals), Mumbai Zone -I, New Custom House, Mumbai. Vide the impugned order, the ld. lower appellate authority upheld the finalisation of assessments in respect of bulk oil and other products falling under Chapter 27 of the Customs Tariff imported by the appellant during the periods from 1996 to 2004 and 2004 to 2006 vide orders dated 1 -2 -2012 and 28 -2 -2011 respectively on the basis of the transaction value declared wherein the adjudicating authority confirmed duty demands of Rs. 44,41,67,992/ - and Rs. 9,00,34,465/ - respectively and quantified the excess duty payments at Rs. 22,38,92,934/ - and Rs. 4,66,24,271/ - respectively. Further vide order dated 7 -2 -2012, the adjudicating authority also appropriated an amount of Rs. 7,47,06,660/ - towards the pending dues from the refunds due to the appellant, M/s. Bharat Petroleum Corporation Limited (BPCL in short). Aggrieved of the same, the appellant is before us.
(2.)The submissions made by the ld. counsel for the appellant can be summarized as follows: - -
"(i) The assessment of imported bulk cargo (crude oil falling under CTH 27.07) should be done on the basis of shore tank quantity and not on the basis of transaction value. Reliance is placed on the C.B.E. & C. circular dated 27 -12 -2002 wherein it has been clarified that in case of all bulk liquid cargo imports, whether for home consumption or warehousing, the shore tank receipt quantity should be taken as the basis for levy of Customs duty. The subsequent C.B.E. & C. circular dated 12 -1 -2006 directing finalisation of assessments on the basis of transaction value is prospective in nature and cannot be applied retrospectively for the period prior to 12 -1 -2006. In appellant's own case vide Order dated 2 -5 -2003 - 2003 (158) E.L.T. 221, this Tribunal had held that shore tank quantity should be the basis of assessment. The said decision pertained to the imports made during 1992 to 1997 when the rate of duty was specific prior to 95 -96 and ad valorem from 95 -96 onwards. Reliance is also placed on the decisions in the case of Arviva Industries - : 2004 (167) E.L.T. 135 (Bom.) and Suchitra Components Ltd. - : 2007 (208) E.L.T. 321 (S.C.) : 2008 (11) S.T.R. 430 (S.C.) in support of the contention that beneficial circular should be applied retrospectively while oppressive circulars should be applied prospectively. Since Boards' circular dated 12 -1 -2006 is oppressive, it should be applied only prospectively.

(ii) Even if the assessments were provisional for the period prior to 12 -1 -2006, the circular dated 12 -1 -2006 cannot be applied to such past provisional assessments and reliance is placed on Arviva Industries case cited supra. Even on merits the circular dated 12 -1 -2006 is not applicable and reliance is placed on the decisions of this Tribunal in the case of HPCL - : 2000 (121) E.L.T. 109 affirmed by the Apex Court in, 2002 (142) E.L.T. A280 (S.C.), National Organic Chemicals Industries Ltd. -, 2002 (142) E.L.T. A280 (S.C.) and appellant's own case cited in the preceding para.

(iii) In any case demurrage charges are not includible in the assessable value of the imported goods as held by the Larger Bench of the Tribunal in Grasim Industries Ltd. case, 2013 (296) E.L.T. 39 (Tri. -LB) affirmed by the Hon'ble Apex Court. The fact that w.e.f. October, 2007, the new Customs Valuation Rules deems demurrage charges to be included as part of the freight itself shows that prior to October, 2007 such charges were not part of the assessable value earlier.

(iv) NCCD duty during the impugned period was on specific rate basis and therefore, as regards the demand towards the said duty, shore tank quantity becomes relevant and has to be charged only on that basis.

(v) While finalising the provisional assessment, excess duty paid should be adjusted against the less duty paid in respect of a few Bills of Entry and reliance is placed on a few decisions of this Tribunal, namely, BSL -, 2014 -TIOL -1410 -CESTAT -DEL, Apar Industries Ltd. -, 2008 -TIOL -173 -CESTAT -MUM, Toyota Kirloskar Auto Parts Pvt. Ltd. - : 2012 (276) E.L.T. 332 (Kar.) and HPCL [Final Order Nos. A/1181 -1183/2013/CSTB/C -I, dated 16 -5 -2013 :, 2014 (314) E.L.T. 313 (T)].

(vi) Refunds arising out of finalisation of provisional assessment should be granted suo motu without filing separate refund claim and the directions issued for filing refund claims separately is contrary to the settled position in law in this regard. Reliance is drawn from the decisions of this Tribunal in MRPL case - : 2014 (300) E.L.T. 159 and IOCL case - : 2012 (282) E.L.T. 368 (Del.).

(vii) No interest is payable in the present case as the imports were prior to July, 2006 but finalized after July, 2006. Sub -section (3) of Section 18 of the Customs Act enabling levy of interest on differential duty on account of finalisation of assessment came into force only on 13 -7 -2006 and hence no interest is payable prior to that date. Support is drawn from the decisions of this Tribunal in the case of Sterlite Industries Ltd. - : 2008 (223) E.L.T. 633 and Raj. Petroleum Products Ltd. - : 2013 (292) E.L.T. 125.

(viii) Unjust enrichment is not applicable in respect of refunds arising on finalisation of provisional assessment for imports made prior to 13 -7 -2006 and finalised after 13 -7 -2006 and principle of unjust enrichment is not applicable to oil marketing companies. Reliance is placed on the decisions in the case of Napino Auto & Electronics Ltd. -2014 -TIOL -732 -HC -DEL -CUS and IOCL - : 2012 (282) E.L.T. 368 (Del.) and Final Order No. 1183/2013/CSTB/C -I, dated 16 -5 -2013.

(ix) The ratio of the decision in the case of HPCL - : 2013 (291) E.L.T. 230 (Tri. -Mum.) and the Larger Bench decision in the case of Excel Rubber -, 2011 (268) E.L.T. 419 (Tri. -LB) is not applicable in the instant case."

Accordingly it is pleaded that the appeals be allowed.
The ld. special consultant appearing for the Revenue, while strongly refuting the contentions of the counsel for the appellant, made the following submissions: - -
"(a) There is no contradiction between the circulars dated 27 -12 -2002 and 12 -1 -2006. The circular dated 27 -12 -2002 dealt with a situation where there was a dispute between the quantity of bulk cargo to be taken for the purposes of assessment, that is, whether the quantity to be taken should be based on ullage survey report or shore tank receipt quantity report. The said circular did not deal with a situation where the Customs duty is ad valorem and payment for the imports are made on transaction value basis irrespective of the quantity received and the transit loss in quantity due to natural causes. The circular dated 12 -1 -2006 dealt with a situation where the rate of duty is ad valorem and price is paid on transaction value basis irrespective of quantity ascertained through shore tank measurement or any other manner. In the present case, during the period involved, the rates of Customs duty were ad valorem and hence the circular dated 12 -1 -2006 would be relevant, except in the case of NCCD duty which was a specific rate of duty.

(b) The question of assessment of crude petroleum imported in bulk was examined by this Tribunal in the case of MRPL v. CC, Mangalore -, 2006 (205) E.L.T. 753 and the question for consideration was whether Customs duty is payable on the total payment made by the appellant for the supply irrespective of the quantity received. In the said case it was held that when the levy is ad valorem, the amount paid or payable on bill of lading quantity is the transaction value and if duty is discharged on such value, that would be the proper discharge of duty irrespective of the actual quantity received, whether it is more or less than the bill of lading quantity. In the said decision, the Tribunal further observed that the Tribunal decision in the case of the said assessee reported in : 2002 (141) E.L.T. 241 did not examine the valuation aspect and the only issue before the Tribunal was only whether duty was payable on the quantity ascertained by ullage survey or the quantity received in shore tank and the decision was rendered following the decision in the HPCL case reported in, 2001 (130) E.L.T. 139 (T), which was not relevant at all. The 2002 decision in appellant's own case was rendered in the context of specific rate of duty. Further the Hon'ble Apex Court in the Surya Roshni Ltd. case [ : 2000 (41) RLT 249 (S.C.) : 2000 (122) E.L.T. 3 (S.C.)] had held that transit losses, for which payments were made by the assessee to the customers as compensation for the losses cannot be deducted from the assessable value of the goods. The ratio of the above decisions apply to the facts of the present case. Further, in Apar Industries Ltd. case, 2008 -TIOL -173 -CESTAT -MUM this Tribunal had held that circular dated 12 -1 -2006 interprets the law as per its understanding and since earlier circular was silent on the aspect of valuation, it cannot be said that a different view has been taken for the earlier period. It was further held in the said case that the circular dated 12 -1 -2006 would apply for past imports also.

(c) As regards the abatement sought with regard to demurrage charges, the ld. special consultant submits that the said issue was considered by this Tribunal in the Seven Seas Petroleum Ltd. case : 2005 (191) E.L.T. 1181 and by a majority decision, it was held that demurrage, wharfage and on shore stock loss contracted to be paid by the buyer importer and forming price of the goods are expenses determined prior to entry of goods and these are includible in the assessable value of the goods.

(d) As regards the plea of the appellant to adjust the short payments made in respect of certain imports against excess payments made against certain other imports, the same issue was examined in the case of HPCL - : 2013 (291) E.L.T. 230 wherein it was held that excess payment of duty found in one set of Bills of Entry cannot be adjusted against short payments for another set and the assessee has to pay duty short paid and separately claim refund of duty paid in excess, subject to time -bar and unjust enrichment. The said decision was based on the Larger Bench decision in the Excel Rubber case -2011 (268) E.L.T. 419 (Tri. -LB). Further the Hon'ble High Court of Bombay in the case of United Spirits Ltd. - : 2009 (240) E.L.T. 513 (Bom.) had held that the provisions of unjust enrichment would apply when refunds become due on finalisation of provisional assessments under Section 18 of the Customs Act. Therefore, the short payments made cannot be adjusted against excess payments and refund claims have to be filed separately for refund of excess payment of duty which would be subject to the provisions of unjust enrichment."

Accordingly he pleads for upholding the impugned order and dismissing the appeals.

(3.)WE have carefully considered the submissions made by both the sides.
3.1 In the present appeals, the issues for consideration and decision can be formulated as follows: - -

"(1) In the context of an ad valorem tax regime, whether duty liability has to be determined on the basis of transaction value paid or payable for the supply of goods or the duty liability should be determined on the basis of the shore tank receipt quantity?

(2) Whether ship demurrage charges are includible in the assessable value of the goods imported?

(3) In the case of provisional assessment of duty which is finalised subsequently, whether short payment of duty made in respect of some Bills of Entry can be adjusted against excess payments made in respect of some other Bills of Entry and whether separate refund claims should be filed for refund of excess payments?

(4) Whether the principles of unjust enrichment would apply when refund arises on account of finalisation of provisional assessments under Section 18 of the Customs Act?

(5) Whether any interest liability accrues prior to July, 2006 in case of finalisation of provisional assessments -

I. In the context of an ad valorem tax regime, whether duty liability has to be determined on the basis of transaction value paid or payable for the supply of goods or the duty liability should be determined on the basis of the shore tank receipt quantity?

3.2 As regards this issue, we should bear in mind that the rate of duty was ad valorem during the period of imports in the present case and the appellant was required to pay to the foreign supplier the value agreed upon for the bill of lading quantity even though the actual quantity received could be less due to ocean and other losses or due to natural causes and the appellant was not entitled for any deduction in the value on bill of lading quantity. As regards the reliance placed by the appellant on the decision in appellant's own case vide order dated 2 -5 -2003, the imports in the said case pertained to the period 1992 -97 and the rate of duty was specific during most of the period of imports. Thus the factual and legal position obtaining with regard to the Customs levy was different when compared to the facts of the present case where the rate of duty is ad valorem. It is a settled position in law that ratio of a decision can be applied to another case only when the fact situation obtaining is identical. The Hon'ble Supreme Court in the case of CCE v. Alnoori Tobacco Products - : 2004 (170) E.L.T. 135 (S.C.) held that -

"Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed.... These observations must be read in the context in which they appear to have been stated.... Judges interpret statutes, they do not interpret judgments. They interpret words of statute, their words are not to be interpreted as statutes". The Supreme Court further observed that "circumstantial flexibility, one additional or different fact may make a word of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper".

Therefore, we are of the considered view that the facts in the case before us are different and distinguishable from those obtaining in the cases relied upon by the appellant and hence the ratio of those decisions are not applicable.

3.2.1 On the contrary, we find that the issue involved herein has been settled by the decision in the MRPL case relied upon by Revenue. The facts which came up for consideration in the said case was as follows. M/s. IOCL used to import petroleum crude in bulk on the basis of the requirement in each refinery of the country and apportion the same to the various refineries. The foreign supplier supplied crude as per the Bill of Lading quantity. M/s. IOC made payment to the foreign supplier on the basis of the Bill of Lading quantity, even though, the quantity received in India might be less on account of ocean loss. On the basis of the apportionment, M/s. IOC prepared derived Bill of Lading in respect of each refinery. M/s. MRPL made the payment to IOC on the basis of the quantity shown in that derived Bill of Lading. Other refineries also followed the same practice. In terms of decided case laws and Board's Circular, in respect of liquid bulk cargo, the quantity of goods imported was equivalent to the quantity received in shore tank. The ocean loss was proportionately shared by all the refineries concerned. The point at issue was the valuation of the crude imported by MRPL. According to Revenue, irrespective of the quantity of crude received by the appellant in the shore tanks, they had to pay duty on the basis of the amount paid to IOC. On the other hand, the appellants contended that duty was payable only on the value of the crude received in the shore tanks. In other words the appellants wanted to pay duty only on the actual quantity received in the shore tanks despite the fact that they had to make payment to IOC on the basis of the quantity shown in the derived Bill of Lading. The Tribunal held as follows in the said case: - -

"6. We have gone through the records of the case carefully. Dispute in this case is the correct valuation of crude petroleum imported by the appellants. The payment made by the appellants is based on the Bill of Lading quantity, despite the fact that the quantity received in the shore tank is less than the Bill of Lading quantity. The difference is normally attributable to various losses which occur from the time of loading at the foreign port till their receipt in the shore tanks of the appellants. There is no reduction in the price payable for the petroleum crude on account of the losses.

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When the levy is on ad valorem basis, Section 14 of the Customs Act comes into play. In the present case, the price actually paid or payable is on the basis of the Bill of Lading quantity. On account of the losses, the appellant is not entitled for any reduction in price. In that case, the amount paid or payable on the Bill of Lading quantity is the transaction value for the purposes of Customs duty irrespective of the fact that the quantity received in the shore tank is different from the Bill of Lading quantity. In a product like petroleum crude, due to various causes, losses occur. This is considered natural. That is the reason for not giving any reduction in the price payable. In these circumstances, there is absolutely no provision to reduce the value to that attributable to the quantity received in the shore tank. It was contended by the learned Advocate for the appellants that in certain cases, the quantity received is more and they are paying more duty. We feel that even in those cases where the quantity received is more, it is enough if the appellants discharge duty liability on the actual amount paid on the basis of the Bill of Lading quantity. There is no legal sanction for collecting more duty when the levy is ad valorem. The learned Advocate further contended that if the stand of the Revenue is accepted, Sections 13 & 23 of the Customs Act would be rendered redundant. We do not agree. Section 13 of the Customs Act makes a provision for waiver of duty on goods pilferage after their unloading and before the proper officer has made an order for clearance for home consumption or deposit in a warehouse. But if the goods are restored to the importer after pilferage he has to discharge the duty liability. In order to emphasis the point that no duty need be paid on goods not received, the learned Advocate has referred to Section 13 & Section 23. We want to make it clear that it is not the question of demanding duty on goods not received. But it is the demand of duty on the transaction value. In spite of the ocean loss, the appellant has to make payment on the basis of the Bill of Lading quantity. Therefore, this is the case where the transaction value arrived at based on the Bill of Lading quantity is payable as price for the quantity received in shore tank.

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10. The adjudicating authority relied on the decision of the Tribunal in the case of Exim India Oil Co. Ltd. (supra) wherein it has been held as follows:

"9. As regards the ocean loss we find that the Hon'ble Supreme Court in the case of CCE v. Surya Roshni Ltd. - : 2000 (122) E.L.T. 3 (S.C.) : 2000 (41) RLT 249 (S.C.) has laid down that the transit losses, for which payments are made by the assessee to the customers as compensation for losses cannot be deducted from the assessable value of the goods. By applying the ratio of the said decision to the facts of the instant case and by keeping in mind that it is the entire quantity inclusive of losses which is being purchased by the appellants from M/s. IOC and for which full payments are being made by the appellants to M/s. IOC we hold that such losses are not permissible deductions."

In the above mentioned case, the Tribunal has relied on Apex Court decision in Surya Roshni's case wherein it was held that compensation to customers for breakage and losses in goods in transit is includible in the assessable value."

3.2.2 As regards the plea that Board's circular dated 12 -1 -2006 should be considered as prospective in nature, this issue was also considered by the Tribunal in Apar Industries Ltd. case (cited supra) wherein it was held as follows: - -

"...As regards the plea that Board Circular should have prospective effect, we find that the circular only interprets the law as per its understanding and since earlier circular was silent on the aspect of the valuation it cannot be said that a different view has been taken for the earlier period. As long as the present circular is not contradictory to the earlier circular the present circular will hold field for past imparts also."

3.2.3 In view of the above factual and legal position, we answer this question in favour of Revenue and against the appellant. In other words, when the rate of duty is ad valorem and payment is made for the bill of lading quantity without any adjustment in value for the various losses, it is on the transaction value that the duty liability has to be discharged and not on the basis of the quantity of bulk liquid cargo which is actually received. As regards the various case laws relied upon by the appellant, we find that they are not relevant to the facts of the present case before us. However as regards NCCD duty which is levied at specific rates, the above analysis will not apply and they will have to be levied on the actual shore tank receipt quantity and we hold accordingly.

II. Whether ship demurrage charges are includible in the assessable value of the goods imported?

3.3 The next question for consideration is whether ship demurrage charges are includible in the assessable value of the goods imported. Revenue has relied on the decision of this Tribunal in the case of Seven Seas Petroleum and the Board's circular dated 2 -3 -2001 to canvass its case. However, we find that this matter was referred to the Larger Bench for consideration in view of conflicting decisions in the matter in the case of Grasim Industries Ltd. (supra). The Larger Bench noted that Rule 10(2) of the Customs Valuation Rules, 2007, which was pari materia with Rule 9(2) of CVR, 1988, added an explanation specifically including ship demurrage charges, lighterage or barge charges in the cost of transport of imported goods. Therefore, for the period prior to 2007, the said charges were not includible even if the assessments were made provisionally. This Larger Bench decision prevails over other decisions of this Tribunal. In the present case, the period involved is prior to 2007. Consequently, it has to be held that ship demurrage charges are not includible in the assessable value of the imported goods prior to CVR, 2007 coming into force and we hold accordingly.

III. In the case of provisional assessment of duty which is finalised subsequently, whether short payment of duty made in respect of some Bills of Entry can be adjusted against excess payments made in respect of some other Bills of Entry and whether separate refund claims should be filed for refund of excess payments? Whether the principles of unjust enrichment would apply when refund arises on account of finalisation of provisional assessments under Section 18 of the Customs Act?

3.4 These two questions need to be considered together as they are interlinked. The appellant has relied on the decisions of this Tribunal in the case of BSL, HPCL, MRPL and IOCL and the Karnataka High Court decision in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. However, Revenue relied on the decision of this Tribunal in the case of HPCL and of the jurisdictional Bombay High Court in United Spirits Ltd. case. We note that the case laws relied upon by Revenue relate to Excise matters whereas in the present case we are concerned with provisional assessment of Customs duties. It would be relevant at this juncture to peruse the decision of the jurisdictional Bombay High Court in the matter. The Hon'ble High Court framed the questions for consideration as follows: - -

"11. From the above contentions and submissions, the following questions will arise for determination:

1. Where an amount is deposited pursuant to provisional assessment, will the doctrine of unjust enrichment be applicable to refund consequent upon final assessment?

2. Where the order of confiscation is set aside and the assessee had earlier deposited an amount towards the value of the goods which amount was adjusted partly towards duty and partly towards fine, will the doctrine of unjust enrichment apply -

Thereafter the Hon'ble High Court proceeded to examine the matter and the relevant extracts from the decision are reproduced verbatim below.

"12. The law on the subject of unjust enrichment has been explained by various judgments of the Supreme Court from time to time. We may gainfully refer to the judgment in case of Sahakari Khand Udyog Mandal (supra), where the Supreme Court observed as under:

"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."

Explaining further the Supreme Court observed, "The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich equitably 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. 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." Reference was made to Fibrosa v. Fairbairn,, (1942) 2 All ER 122 to the judgment of Lord Wright and in case of Nelson v. Larholt,, (1947) 2 All ER 751 to the judgment of Lord Denning. Lord Denning had observed "The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the Court orders restitution if the justice of the case so requires." Lord Wright observed "The remedy in case of unjust enrichment in English law is generically different from the remedies in contract or in tort, and is recognized to fall within a third category of the common law which has been called quasi -contract or restitution." Summing up, the Supreme Court observed "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.

13. Following this judgment, in Sahakari Khand Udyog Mandal (supra) this Court in case of Shree Vindhya Paper Mills v. Union of India - : 2005 (187) E.L.T. 442 (Bom.) in respect of refund of cess and in case of Sharda Synthetics Bombay P. Ltd. v. Union of India - : 2006 (205) E.L.T. 49 (Bom.) in respect of tax liability under the Kar Vivad Samadhan Scheme; even in absence of the statutory provisions applied the doctrine of 'unjust enrichment' and denied the claim of refund on that ground.

14. With this background, let us deal with the first question as raised on behalf of the appellants by the learned counsel. Similar arguments as now advanced were advanced that Explanation II to Section 27 of the Customs Act, 1962 applies to the refund arising on finalization of the provisional assessment and not otherwise. After considering the various provisions, this argument was repelled by this Court in the following words in case of Bussa Overseas and Properties Pvt. Ltd. (supra):

"28. ...This ingenious argument is wholly unsustainable. Once the duty is paid provisionally under Section 18(1) of the Act, any refund of that amount would arise only on final assessment and not otherwise. An importer cannot apply for refund of duty paid provisionally unless there is final assessment order and refund arises on such final assessment order. If the duty determined on final assessment is modified by the Customs authorities at the instance of the importer, then the duty determined as per the modified order will represent the final assessment order. It cannot be said that if the final assessment order is modified at the instance of the importer the modified order does not represent the final assessment order. In other words, if a final assessment order is modified at the instance of the importer, then, the refund arising on final assessment order as well as the additional refund arising on modification of the final assessment order would be governed by Explanation II to Section 27 of the Customs Act. Therefore, there is no distinction between refund arising on finalisation of provisional assessment and refund arising after finalisation of provisional assessment and both refunds are subject to the provisions of Section 27 of the Customs Act."

A Special Leave Petition filed against the judgment was dismissed by the Supreme Court. See, 2004 (164) E.L.T. A177 (S.C.).

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21. It would, thus, be clear that what was under the consideration was the provisions of the Central Excise Act, 1944 and Rules framed thereunder as in 1986. This is not an authority for the proposition that in case of provisional assessment under the Customs Act, the doctrine of unjust enrichment will not apply considering Sections 27(2), (3) of the Customs Act. The doctrine of unjust enrichment will only apply when the assessment is finally completed. There can be no application for refund before the final assessment is made.

22. Insofar as the Customs Act, 1962 is concerned, under Section 27(3), no refund of duty and interest can be made without satisfying the requirements of sub -section (2). Therefore, even though under Section 18, sub -section (5) has been introduced w.e.f. 13 -7 -2006, the issue of refund was always subject to the provisions of Section 27(3), considering that Section 18(2)(a) applies to final assessment. We may only note that the order of this Court dated 30 -10 -1991 in the matter of restitution would be subject to the provisions of Section 27(3) of the Customs Act, 1962.

(emphasis supplied)

23. Our attention was also invited to the judgment in case of Park International Ltd. v. Union of India - : 2001 (127) E.L.T. 329 (Guj.) : (2003 -TIOL -08 -SC -CX), that was the case where the amount was deposited by the petitioner therein during the adjudication proceedings and that amount was regarded as deposit and not duty. The doctrine of unjust enrichment was held by Gujarat High Court as not applicable. The judgment of Gujarat High Court was set aside by the Supreme Court, whilst remanding the matter. It is reported in, 2005 (188) E.L.T. A81 (S.C.)."

As regards this Tribunal, the decision of the jurisdictional High Court prevails over all other decisions. Therefore, respectfully following the same, we hold that the provisions of unjust enrichment will apply even in respect of provisional assessments which are sought to be finalised under Section 18 of the Customs Act and we hold accordingly.

3.4.1 As regards the question whether excess payment of duty found in one set of Bills of Entry can be adjusted against short payments made for another set and whether refund claims need to be filed separately for excess payments made, this issue was considered by this Tribunal in the case of HPCL v. CC, Bombay decided on 30 -6 -2011 [ : 2013 (291) E.L.T. 230 (T)]. After considering the various case laws on the subject, this Tribunal came to the conclusion that any adjustment between the differential amount of duty in relation to the one set of Bills of Entry where there is a short payment and the excess amount of duty covered by another set of Bills of Entry is not permissible. It was further held that "what is required to be done by the assessee is to pay the duty short paid and separately claim refund of the duty paid in excess". Since the issue of unjust enrichment has to be considered, it obviously follows that each transaction has to be examined separately and therefore, there cannot be any clubbing of clearances. Accordingly we answer the question in favour of Revenue and against the appellant.

IV. Whether any interest liability accrues prior to July, 2006 in case of realisation of provisional assessments?

3.5 We find that this issue has been answered in favour of the appellant and against Revenue in the decisions of this Tribunal in the case of Sterilite Industries and Raj Petroleum Products Ltd. wherein it was held that prior to 13 -7 -2006 there was no provision for demand of interest on differential duty on finalization of provisionally assessed Bills of Entry. Levy of interest is substantive in character and therefore, in the absence of specific provisions, the demand for interest cannot be made and we hold accordingly.

3.6 The appellant has also raised a contention that the principle of unjust enrichment is not applicable to oil marketing companies as they sell the goods at prices controlled by the Government. We find that this contention was never raised or considered by the lower authorities and hence it would be inappropriate to give any finding in this regard. We only observe that there is no provision in the Customs Act to support this proposition.

In view of our above findings, the impugned orders are set aside and the matter remitted back to the adjudicating authority for computation of the differential duty demands and also for consideration of the refund claims due to the appellant in accordance with law, in the light of the principles we have laid down hereinabove. The appeals are disposed of in the above terms.

(Operative part of the order pronounced in the Court on 1 -1 -2015)

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