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PJ/Case Laws/2011-12/1571

Admissibility of Refund of redemption fine & penalty amount paid to avoid demurrages

Case:ASIAN GRANITO (I) LTD. V/S COMMISSIONER OF CUSTOMS, AHMEDABAD
 
Citation: 2012 (276) E.L.T 249 (TRI. – AHMEDABAD)
 
ISSUE:- Whether assessee is eligible to claim refund of penalty and redemption fine paid at the time of releasing goods for avoiding demurrages.
 
BRIEF FACTS:-The issue involved in the above case was that the appellant filed a refund claim for Rs 1,10,000 in pursuant to commissioner (appeals’), AHMEDABAD’S order dated 29-10-09 which reduced the redemption fine from Rs 1,50,000 to Rs  60,000 and penalty from Rs 50,000 to Rs 30,000 imposed in the order-in-original. The respondent i.e. commissioner of custom, AHMEDABAD rejected the claim on the ground of unjust enrichment and credited the same to consumer welfare fund. The respondent view was that the appellant has already recognised the fine and penalty as expense in the financial year 2008-09.
 
APPELLANTS CONTENTION:- The appellant contended that the penalty and redemption fine was paid at the time of releasing the goods to avoid demurrages was more than the penalty actually payable therefore they are eligible to the refund claim for the differential amount. They also enclosed the copy of certificate issued by CHARTERED ACCOUNTED.
 
RESPONDENTS CONTENTION:-  The respondent contended that the certificate of  C.A. made it clear that the fine and penalty of Rs 2 lakh paid during the financial year 2008-09 were accounted as expense in the book of account and as per the accounting principle the said amount stands included in the cost of goods sold in the financial year 2008-09 and passed on to the buyers of the goods. According to the respondent the refund of the fine and penalty would amount to receivables in the next financial year.
 
REASONING OF JUDGEMENT:-In another identical case of SAMBHAV ENTERPRISES V/S COMMISSIONER OF CUSTOMS, COCHIN , the amount deposited by the assessee consequent to the orders passed by the adjudicating authority cannot be considered as an acceptance or finality of the order , if an assessee has filed an appeal against the order.
 
DECISION: -The appeal was allowed.

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