Cc, Amritsar Vs. M/S. R.K. Machine Tools (P) Ltd. - Court Judgment

Excerpt:
1. in this application filed by the department, they have claimed that the question of law stated below has arisen from the final order no.a/272/98-nb dated 25.03.98 passed by this tribunal in appeal no.c/120/97-nb. "whether in a case where duty paid imported goods have not been sold as such by the imported but used captively for manufacture of other goods, it can be said that incidence of duty has been passed on by the importer to the buyer of final product." 2. today there is no representation for the respondents. however, they have prayed for a decision on merits without hearing them. the applicants are represented by ld. jdr shri swatantra kumar.3. i have carefully perused the aforesaid final order and examined the grounds of the present application. i have also heard ld. jdr.4. ld jdr submits that the above final order was passed by the tribunal following the ratio of high court judgements including the judgment of the bombay high court in the case of solar pesticides. he, further, submits that the high court's decision in solar pesticides has since been reversed by the apex court in union of india vs solar pesticides pvt. ld. [2000 (116) e.l.t.401 (sc)]. referring to the apex court's decision, ld. jdr submits the principle of unjust enrichment incorporated in section 27 of the customs act would be applicable in respect of imported raw materials captively consumed in the manufacture of a final product. in view of this position, ld. jdr submits, the provisions of section 28d, which casts a burden on the assessee to prove that the incidence of duty paid on the goods has not been passed on to the buyer will also be applicable in respect of imported raw material captively consumed in the manufacture of final product. in the light of this decision of the hon'ble supreme court, ld. jdr prays for allowing the present application and referring the aforesaid question of law to the jurisdictional high court.5. i have examined the above submissions. i have noted that the tribunal had passed the above final order by interpreting the provisions of section 28d in the light of the ratio of the bombay high court's decision in solar pesticides. the high court's decision in solar pesticides (supra) has since been reversed by the apex court as rightly pointed out by ld. dr and the ratio of the tribunal's final order is no longer valid in the light of the supreme court's decision.this argument, however, will not help the department in the present application inasmuch as the law which prevailed at the time when the tribunal passed the above final order was the law laid down by the high court in solar pesticides (supra). the question before me at present is whether the question of law formulated by the revenue in the present application had arisen from the tribunal's final order as on the date on which that order was passed. i would squarely answer this question in the negative. such a question of law did not arise on the date on which the tribunal passed the above final order. even the applicants have no case that such a question of law had arisen out of the final order as on that date. the law laid down on the point subsequently by the apex court would not go to benefit the revenue in the instant matter. i, therefore, find that this application only requires to be rejected and i do accordingly.

Judgment:
1. In this application filed by the Department, they have claimed that the question of law stated below has arisen from the Final Order No.A/272/98-NB dated 25.03.98 passed by this Tribunal in appeal No.C/120/97-NB. "Whether in a case where duty paid imported goods have not been sold AS SUCH by the imported but used captively for manufacture of other goods, it can be said that incidence of duty has been passed on by the importer to the buyer of final product." 2. Today there is no representation for the respondents. However, they have prayed for a decision on merits without hearing them. The applicants are represented by ld. JDR Shri Swatantra Kumar.

3. I have carefully perused the aforesaid final order and examined the grounds of the present application. I have also heard ld. JDR.4. Ld JDR submits that the above final order was passed by the Tribunal following the ratio of High Court judgements including the judgment of the Bombay High Court in the case of Solar Pesticides. He, further, submits that the High Court's decision in Solar Pesticides has since been reversed by the apex Court in Union of India Vs Solar Pesticides Pvt. Ld. [2000 (116) E.L.T.401 (SC)]. Referring to the apex Court's decision, ld. JDR submits the principle of unjust enrichment incorporated in Section 27 of the Customs Act would be applicable in respect of imported raw materials captively consumed in the manufacture of a final product. In view of this position, ld. JDR submits, the provisions of Section 28D, which casts a burden on the assessee to prove that the incidence of duty paid on the goods has not been passed on to the buyer will also be applicable in respect of imported raw material captively consumed in the manufacture of final product. In the light of this decision of the Hon'ble Supreme Court, ld. JDR prays for allowing the present application and referring the aforesaid question of law to the jurisdictional High Court.

5. I have examined the above submissions. I have noted that the Tribunal had passed the above final order by interpreting the provisions of Section 28D in the light of the ratio of the Bombay High Court's decision in Solar Pesticides. The High Court's decision in Solar Pesticides (supra) has since been reversed by the apex Court as rightly pointed out by ld. DR and the ratio of the Tribunal's final order is no longer valid in the light of the supreme Court's decision.

This argument, however, will not help the Department in the present application inasmuch as the law which prevailed at the time when the Tribunal passed the above final order was the law laid down by the High Court in Solar Pesticides (supra). The question before me at present is whether the question of law formulated by the Revenue in the present application had arisen from the Tribunal's final order as on the date on which that order was passed. I would squarely answer this question in the negative. Such a question of law did not arise on the date on which the Tribunal passed the above final order. Even the applicants have no case that such a question of law had arisen out of the final order as on that date. The law laid down on the point subsequently by the apex Court would not go to benefit the Revenue in the instant matter. I, therefore, find that this application only requires to be rejected and I do accordingly.