CC Vs. NEW TRADE LINKS

JUDGEMENT

(1.) THIS is a revenue appeal against Order -in -Appeal No. C3/14/93 dated 20.10.1993 passed by Collector (Appeals), wherein, he has set aside the Order -in -Original dated 22.10.1992 passed by Assistant Collector of Customs rejecting the refund claim of Rs. 1,02,613/ - claimed by the appellants as inadmissible in view of unjust enrichment. Learned Collector (Appeals) had allowed the refund claim on the basis of the Chartered Accountant's certificate dated 7.8.1992, copies of correspondences, sales invoices and purchase orders all of which led him to the conclusion that the sale price before and after the higher duty paid on the goods did not change as it ranged between Rs. 850/ - to 875/ - per piece only. He, therefore, concluded that since the sale price has not increased even after the higher incidence of duty, thereby, it was presumed that the said duty was not passed on to the buyers.

(2.) HEARD Shri Sankaravadivelu, JDR. He submits that the Collector (Appeals) had failed to consider that the importers had not declared their sales invoice for the product imported under Section 28(C) of the Customs Act, even though the Bill of Entry was presented much after 20.9.1991 when the said provision came into existence. Learned JDR further submitted that even as per the Chartered Accountant's certificate the cost of one lamp is Rs. 705/ -. Even if excess duty amount is included, it means that there was a margin of profit ranging between Rs. 145/ - to Rs. 170/ - per piece and if the excess duty is refunded it would add to this profit amount. Therefore, the Chartered Accountant certificate proves that the incidence of duty had been passed on to the customers. He further submitted that though the Tribunal in the case of Metro Tyres Ltd. had held that if an assessee's invoice during the material period showing a composite price without the duty indicated separately, shows that the sales price of the goods before and after the event remained the same, then the obvious conclusion is that the incidence of higher duty was not passed on to the customers, yet this decision has not acquired finality as the revenue's appeal has been admitted before the SupremeCourt as .

(3.) HEARD Shri M.S. Kumaraswamy, learned Consultant for the respondents who submits that they were not in a position to give the declaration under Section 28(C) because unless the goods were cleared from customs they were not in a position to know the true landed cost of the same. He further submits that the sales price of these lamps continued to remain the same (within the same range) before the higher incidence of duty came into the picture in January, 1992 and was maintained at the same level even after payment of the higher duty. He further submitted that their competitors importing in Bombay Port were given the benefit of Notification 67/83 and, therefore, since similar goods were available in the market at identical or even lower price, their attempts to negotiate for selling at higher price failed. Copies of correspondence to this effect were placed before both original as well as first appellate authorities. He further submits that it was factually incorrect that the cost of each tube as per Chartered Accountant certificate was Rs. 705/ -. Instead, after the incidence of higher duties it came to Rs. 808/ -. Further, even this cost did not take into consideration the over -head expenses including the administrative expenses as well as business risks due to price recessions. He further submitted that the test for determination of unjust enrichment due to passing of incidence of duty in such cases where composite invoices are issued has been clearly laid down by the Hon'ble Tribunal in the case of Metro Tyres Ltd. (Supra). Since in their case the pre -event and post event prices remained the same, therefore, as per the test laid down in that decision, the facts in their case clearly satisfy these decisions and the only conclusion available was that the incidence of duty had not been passed to the buyers. He further submitted that though it was true that the Hon'ble Supreme Court had admitted the revenue's appeal against the said decision, it was equally true that the Hon'ble Supreme Court had passed no order with respect to the stay of this decision and, therefore, at this point of time this was good law. He submits that the learned Collector (Appeals) has taken all these factors into consideration and even though the said decision was not placed before him, he has independently applied the same principle in his Order -in -Appeal and, therefore, there is no infirmity in the said Order -in -Appeal which would be upheld by us.