Appeal not maintainable on totally new grounds at the appellate stage.

PJ/Case law/2013-14/1910

Case:-COMMISSIONER OF CUSTOMS (IMPORT), NCH, MUMBAI Vs E-MERCK (INDIA) LTD

Citation:-2013-TIOL-1561-CESTAT-MUM

Brief Facts:-The facts of the case are that the respondents imported 2 nos. of Washing and Siliconizing Machines under Project Import vide Bill of Entry no. 7141 dated 26.07.1991. However, the Contract Cell, New Customs House, Mumbai issued notice to the respondent for submission of reconciliation statement etc. for finalization of the contract. In response to the notice, in case of the above said goods the respondent requested the Contract Cell to delete these goods from Project Contract registered. Thereafter the department issued a notice for payment of differential duty of Rs.84,94,722/- on the goods cleared other than availing Project Import. The demand was cleared other than availing Project Import. The demand was confirmed by the Dy. Commissioner of Customs vide order dated 21.02.2002. The respondent challenged the same before the learned Commissioner (Appeals) who vide Order dated 23.04.2004 set aside the lower adjudicating authority's impugned order and allowed the appeal of the respondent. Consequently, the respondent claimed the refund of Rs.13,09,506/- which was sanctioned by the lower adjudicating authority vide order dated 05.01.2005. The Revenue challenged the same before the Commissioner (Appeals) on the ground that the lower authority has not applied the doctrine of unjust enrichment. The learned Commissioner (Appeals), after considering the facts upheld the lower adjudicating authority's order and rejected the appeal filed by the Revenue.

Appellant Contentions:- The contention of the appellant is that the lower authorities have considered the balance sheet for the year ending December 2003 but have not considered Books of Account or details of Schedule X of the balance sheet for the year 2001. The contention of the Revenue is that as per the balance sheet for the year ending December 2001 the receivable amount was Rs.1,41,10,000/- lakhs whereas the balance sheet for the year ending 2003 when the matter was decided by the lower adjudicating authority shows that receivable amount was only Rs.4,91,00,000/- lakhs. The contention is that the lower adjudicating authority has not called the requisite documents to ensure the exact break-up of Rs.4,91,00,000/- lakhs and whether the amount of refund was covered under the amount of Rs.4,91,00,000/- lakhs.

Respondent Contentions:-The respondent filed counter styled as Cross Objection wherein they have contended that the duty amount involved in this case was recovered by the department consequent to Dy. Commissioner order dated 22 January 2002 by encashing bank guarantee of Rs.13,09,506/-. The respondent further submitted consequent to the order of the learned Commissioner (Appeals) dated 23.03.2004 the en-cashed bank guarantee was required to be returned to the respondent. Therefore it will not be hit by doctrine of unjust enrichment.

Reasoning of Judgment:- Admittedly the amount in this case was realized by the department by encashing the bank guarantee. The refund is sanctionable or not is not the issue in this case as neither side has challenged the same. The case of the department is that the lower authorities while deciding the question of unjust enrichment have not taken into consideration the fact that during 2001 if the amount receivable was Rs.1411.0 lakhs whereas during 2003 the amount receivable was Rs.496.0 lakhs. The grievance of the department is that the respondent has not shown the breakup of Rs.496.0 lakhs and has also not shown that the said amount covered the amount of Rs.13,09,506/- which was to be refunded. All these aspects have been taken into consideration by learned Commissioner (Appeals) in his order. Secondly, the amount of Rs.496.0 lakhs can undoubtedly cover an amount of Rs.13,09,506/- lakhs. If the department had any doubt in this regard nothing prevented them to investigate and establish that the amount of Rs.13,09,506/- is not covered in Rs.496.0 lakhs. The department did not carry out any such exercise. Further the learned A.R made an alternate plea to get the issue re-examined by the lower authorities. Since the department has not taken any step before or after filing the appeal to find out whether Rs.13,09,506/- lakhs was covered/not covered under Rs.496.0 lakhs. Crying fire is of no avail if one cannot show even a streak of smoke.
In view of the above findings, the appeal filed by the revenue department was dismissed as being devoid of any merits.
Decision:-Appeal dismissed.

Comment:-The essence of this case is that when no question for verification as regards amount of refund claim being shown in the receivables shown in the balance sheet were raised by the adjudicating authority, the same cannot be demanded at the appellate stage.

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