(1.) THE issue involved, in this appeal filed by M/s. Infar (India) Ltd., is whether the principle of unjust enrichment is applicable to the refund of Customs duty claimed by them.
(2.) SHRI L.P. Asthana, learned Advocate, mentioned that the Appellants had filed ten bills of Entry claiming classification of Agglutinating Sera for the detection of human chorionic gonadotrophin in urine under Sub -heading 3002.90 of the First Schedule to the Customs Tariff Act, read with Notification No. 208/81 -Cus dated 22.9.1981 which was upheld by the Tribunal vide Order Nos. 636 -637/96 -C dated 14.10.1996; that they then filed refund claims which were denied to them by the Assistant Commissioner on account of applicability of principle of unjust enrichment holding that the Appellants had not been able to prove by any documentary evidence that the duty was borne by them, and that the Customs duty was not indicated in balance sheet as outstanding/recoverable; that the Commissioner (Appeals) also under the impugned Order, rejected their appeal relying upon the judgment of the Supreme Court in the case of Mafatlal Industries v. UOI and holding that merely by remarking in the invoices that the prices did not include customs duty and by continuing to maintain the same price it cannot be said that they had not passed on the burden of duty. The learned Counsel submitted that the Supreme Court did not intend to hold nor has it held that in every case, without exception, it will be deemed that the incidence of duty has been passed on to the customer; that it will be possible for an assessee or importer to prove in a given case that the incidence of duty has not been passed on to the Customer; that it is evident from the judgment of the Supreme Court in Living Media India Ltd. v. UOI that in a given case it is possible to establish that the duty incidence has not been passed on to the customer since in the said matter refund of excess duty was held to be admissible without insisting any affidavit from the petitioner on the basis of unjust enrichment; that whether in a particular case incidence of duty has been passed on to the buyer or not is a question of fact; that their sale prices had remained constant during the period when duty was being charged by the Customs and during the period when no duty was paid by them; that in such situation, the Tribunal, after taking note of the decision in Mafatlal Industries case, has held in the case of CC Chennai v. New Trade Links 1999 (33) RLT 205 (CEGAT) : 1999 (83) ECR 872 (T) that in case of no change in the range of sale price of the goods before and after imposition of higher duty, refund is admissible as incidence of higher duty has not been passed on. He also mentioned that the Commissioner (Appeals) has impliedly admitted that they sold the goods without including the duty to earn goodwill; that the auditors have categorically certified that prior to the dispute when Customs Authorities were not charging the duty, particular price was being charged by the Appellants; that Mr. Sebastian Joseph, Director of the Appellant Company, has mentioned in his affidavit that the Company had not passed on to its customers and/or to consumers the incidence of the customs duties paid by them. He further mentioned that for commercial reasons the products had to be sold without including the customs duty; that the Appellants deal in and are market leaders of family planning medicines and devices; that it would have been suicidal for them to withdraw one of its most popular products out of basket of family planning products; that by not marketing the impugned product without any substitute, they would have lost their market share in this competitive industry; that the Commissioner (Appeals) is in fact trying to find out facts by applying the ratio of the decision in the case of Mafatlal Industries; that there was no requirement in law or accounting practice for them to show the amount as outstanding in the balance sheet; that this cannot be a ground for rejection of the refund claim. He finally relied upon the following decisions:
(3.) COUNTERING the arguments, Shri M.M. Dubey, learned D.R., submitted that the Appellants have not shown the amount of refund, claimed by them, in their balance sheet as an outstanding amount; that this goes to show that the incidence of Customs duty was not borne by them; that with the intent to remain in the market, they had sold the goods at the price prevalent prior to the payment of duty; that the affidavit filed by the Director is subsequent to the event and as such is of no relevance; that the judgment of the Supreme Court in Solar Pesticides case makes it very clear that the phrase 'incidence of duty' is of wide implications than the burden of duty; that for arriving at the price of the product, all expenses incurred has to be included. He finally submitted that the ratio of the decision in the case of New Trade Links, supra, is not applicable as the facts are different since the Collector (Appeals) in that matter had considered the correspondence regarding the unsuccessful attempts by the assessee to increase its sale price.