ITI LTD. Vs. CC

JUDGEMENT

(1.) THE appellant, a PSU of Govt. of India, is aggrieved with the rejection of their refund claim filed in respect of goods which were pilfered when the same were still within the area of M/s. International Airports Authority of India (IAAI), the custodian of the cargo. There is no dispute regarding pilferage of 480 numbers of IC, on which duty of Rs. 2,32,438 had been paid. They prayed refund of this amount as the goods had not yet been removed from the custodian of goods, namely, IAAI and that there was a mahazar undertaken by the surveyor, who by their report dated 16.2.94 recorded about the pilferage of the item on which the duty had already been paid. Appellants have explained that their company being a Govt. unit, they are permitted to make the payment of duty before the goods are checked and taken in possession as against the procedure of having the goods checked and duty paid. They further contend that in terms of Section 13, my imported goods which are pilfered after unloading thereof and before the Proper Officer has made an order for clearance for home consumption or deposit in the warehouse, the importer shall not be liable to pay duty, leviable on such goods except where such goods are restored to the importer after pilferage. They have also drawn the attention to Section 23 of the Customs Act which also lays down the provision for remission of duty on loss, destroyed, or goods which are abandoned before the clearance for home consumption and in such circumstances, the Asst. Commissioner of Customs shall remit the duty on such goods. It is stated that the goods had not been cleared and the Insurance Survey was conducted in the presence of the officials of the custodian of the cargo i.e. IAAI and the survey was also recorded in the Survey Report of IAAI. M/s. IAAI had informed the Customs Officers about the survey being done. They also contended that they had not received any insurance money on the duty paid but only on the value on the goods which were pilfered. They also contended that the finding recorded by the authorities that they are not eligible for refund as the goods were cleared and survey was conducted thereof and that refund of remission of duty on goods found out after the pass order was given being not admissible is not correct interpretation of law.

(2.) WE have heard Shri R. Krishnamurthy, Finance Manager for the appellant - PSU and Ld. SDR.

(3.) ON a careful consideration of the submissions made by both sides, we are of the considered opinion that in this particular case, there is no dispute made by the revenue regarding the pilferage of the items when the goods were still lying in damaged condition at the Air Cargo Complex. The Air Cargo Complex was within the jurisdiction of IAAI who have been appointed as warehouse keeper for the air parcels. The clearing and forwarding agent addressed a letter dated 14.2.92 to the AC, Air Cargo Complex seeking permission for carrying out the survey on imported parcel which were lying in damaged condition at the Air Cargo Complex. The Asst. Commissioner, Air Cargo Complex, Madras -27 has clearly permitted the same by writing "permitted and initialed on 14.2." Copies were also furnished to the Air India, M/s. IMI, Robinson Air Service and the survey on the disputed consignment was carried out by the surveyor and the survey report clearly opined that the package had been tampered and the goods had been found missing. A complaint by FIR was also lodged by the appellants by letter dated 18.6.94. The ground for dismissal -refund is that the goods were cleared and the survey was conducted thereafter and -' refund of remission of duty on goods found out after the pass order was given is not admissible; and that no customs officer was associated with the survey. The AC cannot take this plea of the Custom Officers not being associated with the survey for the reason that when the clearing and forwarding agent by his letter dated 14.2.94 sought permission for survey of the parcel, the Asst. Commissioner of Customs, Air Cargo Complex clearly permitted them to carry out the survey and the materials on record i.e. his survey report, letters of IAAI clearly establish about the loss of the article. The question which has arisen for consideration whether duty is required to be refunded or not. The Commissioner (Appeals) took the view that the incidence of duty was passed on to the insurance company is erroneous for the reason that insurance company has not discharged the duty element but has only discharged the value of the goods being CIF value of lost goods as arrived at in the worked out by their certificate dated 15.7.96. On a perusal of the certificate and the working out therein, it is clear that the duty element has not been refunded. Therefore, the refund is not hit by the provisions of unjust enrichment.