M/S. Bechtel International Inc. Vs. Commissioner of Customs, - Court Judgment

Excerpt:
the appellants imported certain ready made housing units, kitchen diner and a water treatment plant with chemicals, as per the documents such as commercial invoice etc. the goods were packed in 18 containers. 17 containers came in the first lot. these were subjected to detailed examination. these goods were cleared on payment of duty. the 18th container arrived later. the impression of the importer was that it contained chemicals for water treatment. the igm declared the same. however, on examination, apart from the chemicals, a water treatment plant was also found in the 18th container. duty was accordingly charged thereupon. at a later date, the claim for refund of rs. 11,90,369/- was made. the ground was that under wrong presumption that the water treatment plant was contained in the cargo brought by the 17 containers, the importers had already paid duty thereupon and payment of duty once against amounted to double payment.2. the second claim for rs. 12,72,058/- arose on the plea of unjustified loading of value on the kitchen diner modular. as per the invoice, the cif value was us$ 41521.23. a chartered engineer's certificate was produced certifying that the machine was manufactured in 1977 and was fully refurbished with an expected residual life of 10 years. the certificate is dated 15.12.1994. the customs on examination found the extent of refurbished with an expected residual life of 10 years. the certificate is dated 15.12.1994. the customs on examination found the extent of refurbishing to be such as to treat the old machine as a new one. they accordingly look the value for assessment at us$ 86000. in order to save time since their program was time bound, the loading in valuation was accepted by the importers and duty was paid.the refund claim was subsequently made on the ground of unjustified loading.3. the dy. commissioner, dealing with the claim of double payment of duty on the water treatment plant observed that the non-arrival of the water treatment plant in the first 17 containers was not documented anywhere. he observed that short shipment of the plant was not certified by the custom nor the survey was done by the importers. he dismissed the claim as non substantiated. as regards the second claim on the kitchen units, he observed that once the importers had accepted the valuation and had paid duty, they could not made subsequently the claim of refund. the commissioner (appeals) upheld the rejection.hence, the present appeal.4. we have heard shri mondal at length for the appellants and shri choubey equally at length for the revenue.5. the claim for short shipment on non receipt of the goods has to be documented. the provisions of the customs act in terms of sec. 13 and sec. 23 cover the situation where such short shipment or non shipment is noticed by the customs in the docks and upto the time when the order of their clearance for home consumption is made. the situation of claiming refund subsequent of the removal of the goods from docks is not covered under any specific provision. in the following judgements, the tribunal had acknowledged the capability of claim made even after the clearance of the goods from the customs subject to certain specifications: 6. the tribunal in the said judgement observed that such claim has to be made on sufficient documentation such as survey by an independent agency. the present situation where the double payment is claimed on the water treatment plant does not fall under those guidelines. the burden of proof of single importation and double payment of duty is cast heavily on the importers and could be discharged only by sufficient proof. the mere avernment would not suffice. shri mondal referred to the affidavit dated 10.5.96 (filed after the adjudication order was passed). we find that it does not make any avernment discharging the burden cast upon the importers. in the situation, we find that the denial of refund claim of rs. 11,90,369/- was correctly made and is upheld.7. as regards the claim for refund of the differential duty paid on the loading of the price, we find that the importers have made a strong case. shri choubey time and again impressed upon as the acceptance of the importers of the loading of the value. we find that in the refund claim a specific statement was made to the effect that the importers at the time of imports were forced to clear the goods at the inflated value. we find relevance in the judgement of the tribunal in the case of laxmi colour lab [1992(62) e.l.t. 613 (tri)] made in following the judgement of the supreme court in the case of dunlop india ltd. [1983(13) elt 1566(s.c.). the tribunal in this case quoted the supreme court decision in the following words: "there is no estoppel in law against a party in taxation matter. if a party, in order to clear the goods for customs, has given the classification in accordance with the wishes of the authorities or even under some misapprehension, and if the law allows it a right to ask for refund on proper appraisement and which is actually applied for the party cannot be estopped from making such application and ask for such refund." the tribunal held that initial acceptance should not prevent the assessee from agitating the matter at a later date. it is correct that the assessee could have agitated at the assessment stage by seeking an assessment order and making grievance thereupon. but that does not prevent the alternative remedy of seeking refund. we also have seen the grounds on which the value was enhaved. the dy. commissioner made the following observations "on customs examination, the refurnished unit was taken as a new one since the reconditioning work had been carried out very well by the shippers. it was therefore treated as a new one and charged duty on the estimated c.i.f. cost of new unit given by the c.e. viz. us $ 86000.00 as against the declared cif $ 41521.23." 8. in the entire proceedings we do not find any contest made of the transaction value charged by the suppliers. there is no justification given by the revenue as to why the transaction value merited denial.therefore, there was absolutely no logic in adopting the value of the new unit suggested by the engineer who inspected the machine at the appropriate time.9. there is a definite procedure prescribed, where the customs do not accept the transaction value, a set of rules has to be followed. the transaction value cannot be denied on the flimy ground as has been done by the dy. commissioner and accepted by the commissioner(appeals). we find that there is no reason or authority for enhancement of the value.the refund claim of rs. 12,72,058/- therefore, succeeds. the impugned order to that extent is set aside with orders for consequential relief.

Judgment:
The appellants imported certain ready made Housing Units, Kitchen Diner and a water treatment plant with chemicals, As per the documents such as commercial invoice etc. the goods were packed in 18 containers. 17 containers came in the first lot. These were subjected to detailed examination. These goods were cleared on payment of duty. The 18th container arrived later. The impression of the importer was that it contained chemicals for water treatment.

The IGM declared the same. However, on examination, apart from the chemicals, a water treatment plant was also found in the 18th container. Duty was accordingly charged thereupon. At a later date, the claim for refund of Rs. 11,90,369/- was made. The ground was that under wrong presumption that the water treatment plant was contained in the cargo brought by the 17 containers, the importers had already paid duty thereupon and payment of duty once against amounted to double payment.

2. The second claim for Rs. 12,72,058/- arose on the plea of unjustified loading of value on the kitchen diner modular. As per the invoice, the cif value was US$ 41521.23. A Chartered Engineer's certificate was produced certifying that the machine was manufactured in 1977 and was fully refurbished with an expected residual life of 10 years. The certificate is dated 15.12.1994. The Customs on examination found the extent of refurbished with an expected residual life of 10 years. The certificate is dated 15.12.1994. The Customs on examination found the extent of refurbishing to be such as to treat the old machine as a new one. They accordingly look the value for assessment at US$ 86000. In order to save time since their program was time bound, the loading in valuation was accepted by the importers and duty was paid.

The refund claim was subsequently made on the ground of unjustified loading.

3. The Dy. Commissioner, dealing with the claim of double payment of duty on the water treatment plant observed that the non-arrival of the water treatment plant in the first 17 containers was not documented anywhere. He observed that short shipment of the plant was not certified by the Custom nor the Survey was done by the importers. He dismissed the claim as non substantiated. As regards the second claim on the Kitchen units, he observed that once the importers had accepted the valuation and had paid duty, they could not made subsequently the claim of refund. The Commissioner (Appeals) upheld the rejection.

Hence, the present appeal.

4. We have heard Shri Mondal at length for the appellants and Shri Choubey equally at length for the Revenue.

5. The claim for short shipment on non receipt of the goods has to be documented. The provisions of the Customs Act in terms of Sec. 13 and Sec. 23 cover the situation where such short shipment or non shipment is noticed by the Customs in the Docks and upto the time when the order of their clearance for home consumption is made. The situation of claiming refund subsequent of the removal of the goods from Docks is not covered under any specific provision. In the following judgements, the Tribunal had acknowledged the capability of claim made even after the clearance of the goods from the Customs subject to certain specifications: 6. The Tribunal in the said judgement observed that such claim has to be made on sufficient documentation such as survey by an independent agency. The present situation where the double payment is claimed on the water treatment plant does not fall under those guidelines. The burden of proof of single importation and double payment of duty is cast heavily on the importers and could be discharged only by sufficient proof. The mere avernment would not suffice. Shri Mondal referred to the Affidavit dated 10.5.96 (filed after the adjudication order was passed). We find that it does not make any avernment discharging the burden cast upon the importers. In the situation, we find that the denial of refund claim of Rs. 11,90,369/- was correctly made and is upheld.7. As regards the claim for refund of the differential duty paid on the loading of the price, we find that the importers have made a strong case. Shri Choubey time and again impressed upon as the acceptance of the importers of the loading of the value. We find that in the refund claim a specific statement was made to the effect that the importers at the time of imports were forced to clear the goods at the inflated value. We find relevance in the judgement of the Tribunal in the case of Laxmi Colour Lab [1992(62) E.L.T. 613 (Tri)] made in following the judgement of the Supreme Court in the case of Dunlop India Ltd. [1983(13) ELT 1566(S.C.). The Tribunal in this case quoted the Supreme Court decision in the following words: "There is no estoppel in law against a party in taxation matter. If a party, in order to clear the goods for customs, has given the classification in accordance with the wishes of the authorities or even under some misapprehension, and if the law allows it a right to ask for refund on proper appraisement and which is actually applied for the party cannot be estopped from making such application and ask for such refund." The Tribunal held that initial acceptance should not prevent the assessee from agitating the matter at a later date. It is correct that the assessee could have agitated at the assessment stage by seeking an assessment order and making grievance thereupon. But that does not prevent the alternative remedy of seeking refund. We also have seen the grounds on which the value was enhaved. The Dy. Commissioner made the following observations "On Customs examination, the refurnished unit was taken as a new one since the reconditioning work had been carried out very well by the shippers. it was therefore treated as a new one and charged duty on the estimated C.I.F. cost of new unit given by the C.E. viz. US $ 86000.00 as against the declared CIF $ 41521.23." 8. In the entire proceedings we do not find any contest made of the transaction value charged by the suppliers. There is no justification given by the Revenue as to why the transaction value merited denial.

Therefore, there was absolutely no logic in adopting the value of the new unit suggested by the Engineer who inspected the machine at the appropriate time.

9. There is a definite procedure prescribed, where the Customs do not accept the transaction value, a set of rules has to be followed. The transaction value cannot be denied on the flimy ground as has been done by the Dy. Commissioner and accepted by the Commissioner(Appeals). We find that there is no reason or authority for enhancement of the value.

The refund claim of Rs. 12,72,058/- therefore, succeeds. The impugned order to that extent is set aside with orders for consequential relief.