Decided on February 25,2015

Puja Enterprises Appellant
Commissioner Of Customs (Ep) Respondents


P.S. Pruthi, J. - (1.)THIS appeal is directed against impugned Order -in -Appeal in which Commissioner (Appeals) upheld the order of the adjudicating authority, who sanctioned the refund but credited the same to the Consumer Welfare Fund. The facts are that the appellant imported 'Vitamin B2 Riboflavin' and filed a Bill of Entry. The goods were restricted for import in terms of EXIM Policy. The appellant claimed to be a transferee of Advance License issued to M/s. Betul Oil and Flour Mills and submitted copy of the transfer letter. However, they were unable to produce the original Advance License. Therefore, the goods were confiscated with option to redeem the same on payment of fine and penalty was also imposed. The matter was litigated upto the High Court and the Hon'ble High Court had granted interim relief to the importer on payment of duty and submission of Bank Guarantee. The goods were released accordingly after being reassessed provisionally on payment of duty of Rs. 6,13,139/ -. Ultimately, the case was adjudicated by the Commissioner of Customs, who held that the goods were covered by the Advance License and ordered re -assessment of Bill of Entry by suitable debit in the licenses. Therefore, the appellant applied for refund of Rs. 6,13,139/ - along with interest of Rs. 27,717/ -, total amounting to Rs. 6,40,856/ -. The adjudicating authority sanctioned the refund but credited the same to the Consumer Welfare Fund as the bar of unjust enrichment was not cleared.
(2.)THE learned Counsel for the appellant states that the goods were initially cleared under provisional assessment, hence passing of duty to the customers cannot be inferred. He relied on various judgments, such as, Shethia Audio Video Pvt. Ltd. - : 2003 (161) E.L.T. 452 (Tri. -Mum.), Brindavan Processors Pvt. Ltd. : 2006 (196) E.L.T. 61 (Tri. -Bang.) : 2007 (8) S.T.R. 111 (Tribunal) and Gopi Krishna Processors Pvt. Ltd. : 2007 (210) E.L.T. 529 (Tri. -Del.), in which the importance of validity of C.A. certificate has been emphasized. He referred to the certificate submitted by the C.A., Ref. No. 13/2013 to show that the sale proceeds of the relevant goods were less than the purchase cost. The learned Counsel also relied on the decision of the Tribunal in the case of Veekay Products Ltd. vide Order No. A/249/13/CSTB/C -I, dated 24 -1 -2013 : : 2013 (296) E.L.T. 363 (Tribunal) holding that bar of Section 28D is not applicable to refund of pre -deposit.
The learned AR referred to the certificate of the C.A. dated 19 -11 -2010 bearing Reference No. 423/10 stating that the amount of import duty is not shown separately in the balance sheet, but the same has been added to the cost of material purchased.

(3.)I have considered the submissions of both sides. The first point to be examined is whether the amount paid was on account of duty or not. It is clear from the facts that consequent to Hon'ble High Court's direction, an amount of Rs. 6,13,139/ - was paid as duty even though the Bill of Entry was assessed provisionally. Therefore, the case of Veekay Products Ltd. (supra) is not applicable.
4.1 The next issue to be considered is whether unjust enrichment will apply to cases of provisional assessment. I note that the duty was finally assessed by the order of the Commissioner. At the time of provisional assessment, the amount was paid as duty and the goods were released. Clearly when the amount has been paid as duty, the test of unjust enrichment will have to be applied. It has been stated in the adjudication order as well as order of the Commissioner (Appeals) that the appellant failed to submit an invoice to justify his stand and therefore, has not been able to clear the presumption under Section 28D of the Customs Act, according to which he is obliged to prove that the duty incidence has not been passed on to the buyers of goods. Simply stating that the goods were sold at a loss does not establish that the duty incidence was not passed. In fact, the C.A. certificate dated 19 -11 -2010 clearly states that the amount of duty has been added to the cost of material purchased in the balance sheet. This establishes that burden of duty was passed to the customers.

In view of the facts and legal frame -work, the appellant has not been able to clear the test of unjust enrichment. Accordingly, the appeal is rejected.


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