COMMISSIONER OF CUSTOMS Vs. ORGANAN (INDIA) LIMITED

JUDGEMENT

(1.) Revenue has filed the present appeal under Section 130E of the Customs Act, 1962 (for short, the Act ) against the final order No. 147/2002-C dated 9-7-2002 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Block No. 2, R.K. Puram, New Delhi (for short, the Tribunal ), whereby the Tribunal reversing the order-in-original as well as the order of the appellate authority has held that the respondent-assessee, hereinafter referred to as the assessee , would be entitled to the refund of the customs duty paid by it.

(2.) Facts : Assessee filed ten Bills of Entry claiming classification of Agglutinating Sera for the detection of human chorionic gonadotrphin in urine under Sub-Heading 3002.90 of the First Schedule to the Customs Tariff Act. That under Notification No. 208/81-Cus., dated 22-9-1981, goods in question were exempt from payment of customs duty and that is why it was not liable to pay any customs duty on the imported goods. Customs authorities did not agree with this contention and consequently asked the assessee to pay customs duty to the tune of Rs. 94,86,522/-. Assessee paid the whole customs duty Under Protest and got the goods released. Orders of the customs authorities were ultimately reversed by the Tribunal and it was held that the goods imported by the assessee would be classifiable under Sub-Heading 3002.90 and were exempt from payment of customs duty under the aforesaid notification. This order became final.

(3.) Assessee thereafter filed an application claiming refund of the customs duty paid by it. The authority-in-original rejected the claim on the ground that the assessee had passed on the burden of the customs duty to its customers and refund of the customs duty would amount to unjust enrichment as provided under Sections 27, 28(C) and (D) of the Act. Assessee challenged the order-in-original before the Commissioner of Customs (Appeals). Commissioner of Customs (Appeals) upheld the order-in-original. Assessee thereafter filed appeal before the Tribunal. Initially, there was a difference of opinion between the Member (Technical) and Member (Judicial) regarding the refund of the customs duty. It was held by the Member (Technical) that the incident of duty has not been passed on to the customers and therefore the assessee is eligible to claim the refund of custom duty whereas Member (Judicial) held it otherwise. The matter was referred to a third Member who agreed with the Member (Technical) holding that the incident of duty had not been passed on to the customers and therefore the assessee is eligible to refund of the customs duty. It is an admitted position that the burden to prove that the customs duty was not passed on to the customers is on the assessee. The Member (Technical) and the third Member on the basis of the following facts :