Page 131 - ELT_15th August 2020_Vol 373_Part 4

2020 ] 3F INDUSTRIES LIMITED v. ASSTT. COMMR. OF CUSTOMS, NAGAPATTINAM 465

richment. The sole basis appears to have been that the amount claimed as refund
was not charged to the profit and loss account but retained in ‘receivables’ ac-
count.
4. A first appeal was filed before the Commissioner (Appeals) that
came to be rejected on 10-1-2017. In further appeal before the Central Excise and
Sales Tax Appellate Tribunal (CESTAT), the petitioner partly succeeded, since by
order dated 10-1-2017 [2018 (363) E.L.T. 622 (Tri.-Chennai)], the CESTAT re-
manded the issue to the file of the Assessing Authority in the following terms :
5. What is not in dispute is the eligibility of the refund claim. Both
the lower authorities agree that the refund claim is sanctionable. However,
they hold that the claim did not pass the test of unjust enrichment and ac-
cordingly, it requires credited to the Consumer Welfare Fund. One of the
grounds for this stand is that the importer had not provided sufficient doc-
uments with regard to unjust enrichment. In fact, the original authority in
his order, white sanctioning the amount ordering its credit to Consumer
Welfare Fund, and rejecting the claim of the appellant for payment of inter-
est and additional interest, has however ordered that the appellant shall
submit the original documents pertaining to the subject refund claim as and
when traced. Be it as it may, that the appellant contends that they have
produced all the invoices concerning sate of goods warehoused and then
cleared to prove that they have not passed on the incidence of duty. All that
is then required to be seen whether the impugned warehoused goods after
their clearance have been sold by appellant well before the payment of dif-
ferential duty of customs and/or whether the burden of differential duty
has been passed on in any of the invoices. The representative of the appel-
lants is vociferous in his contention that they have paid the differential duty
only after sale of all the goods was completed. However, on their own ad-
mission, all these documents have not been produced before the sanction-
ing authority. Accordingly, we are of the considered opinion that the appel-
lants should be given another opportunity before the original authority to
prove their bona fides and to establish that they have indeed completed the
sale of goods before they paid up the differential duty to their buyers. Once
this aspect is able to be proved, the treatment of the impugned amount in
their books of accounts, whether as receivables or charged to profit and loss
account will not be of much consequence. This refund claim has been aris-
ing out of 8 dispute in the year 2001. The appellant has even approached to
the Hon’ble High Court and only on the orders of the High Court they pre-
ferred the refund claim. More than 16 years have been passed in the inter-
regnum. In the circumstances, it would be appropriate that the de novo pro-
ceedings would be completed without undue delay, in any case, within
three months of the date of the receipt of this order. Needless to say, in such
de novo proceedings, the appellants shall be permitted to produce additional
evidence if any, so desired. All issues are left open including the claim of in-
terest on the refund amount.
5. The proceedings were taken up on remand by the Assessing Officer
and in the ultimate analysis, the claim of the petitioner stood rejected vide im-
pugned order dated 9-2-2018. The authority has, in my considered view, not ad-
dressed the matter in proper perspective. He first refers to the order of CESTAT
as ‘an opinion’ that he then, ‘takes into consideration for deciding the issue on hand’.

EXCISE LAW TIMES  15th August 2020  131