[Order per : G.N. Srinivasan, Member (J)]. - These appeals are filed by the department against the impugned order whereunder the Commissioner (Appeals) had granted benefit of Notification 64/93.
2. The facts of the case are the respondents imported Honda Accord Cars. They claimed benefit of Notification 64/93-C.E. They also sought refund of 10% of total CVD at the time of importation. It is an admitted fact between the parties that the car was manufactured abroad and duty was paid for its clearance and the refund was due to the assessee respondents on the basis of the documents furnished by them for having registered as a taxi. The adjudicating authority denied exemption on the ground that notification being a conditional one its benefit can only be extended to manufacturers who fulfil the condition specified thereon. He further held that being an importer tourist transporter only and not a manufacturer, the claimant would not be in a position to fulfil the specified conditions. Against this order an appeal was filed and the appellate authority held that the assessee importer had correctly claimed the benefit of Notification 64/93. He further held that main consideration whether that the importer satisfies the condition mentioned in Notification 64/93. He held that the term manufacturer in Notification 64/93 should be considered as an importer for the purpose of levy of additional duty in terms of Section 3 of the Customs Tariff Act, 1975. He also followed the judgment of the Supreme Court in the case of Thermax Pvt. Ltd. v. CC - and he granted refund as claimed by the assessee respondents. Hence the appeal by the department.
3. Learned DR submits that the Notification 64/93 cannot be made applicable to the facts of the case. She would contend in any event that the notification being a conditional one the assessee not in a position to fulfil the condition could not be held to be entitled to the benefit of the notification. In any event she continues that the doctrine of unjust enrichment would be applicable in view of the judgment of the Supreme Court in the case of Solar Pesticides - . She emphasizes the fact that the importer respondents being not a manufacturer in terms of Notification 64/93 could never be entitled to the benefit of the said notification.
4. As against this Shri V.S. Nankani, learned Counsel for the respondent assessee, argued that the entire case has to be viewed from the philosophy behind the provisions of Section 3 of the Customs Tariff Act. He states that the same notification has been interpreted by the Supreme Court in the recent judgment in the case of Hyderabad Industries Ltd. - and the case of J.K. Synthetics - as to hold that the importer is treated as the manufacturer. He also relied on the observations of the Supreme Court judgment in Thermax Pvt. Ltd. - at page 360. He states that once the goods have been registered as a taxi by the importer himself the question of doctrine of unjust enrichment being made applicable does not arise.
5. We have considered the rival submissions. The Notification 64/93 envisages levy of duty at 40% as well as at 30%. The imposition of duty at 30% would be made only if there is compliance of the conditions mentioned therein. We are concerned with the applicability of condition No. (iii) of the said notification. The said condition provides that if the manufacturer had not collected from the person in whose name such saloon car has been registered as a taxi, or in a case had collected and as refunded to such person, amount equivalent of such further exemption of duty. The thrust of the argument of Shri Nankani is very simple. If the goods are not sold at all the question of passing on the exemption benefit does not arise in this case. He states that the importer has been treated as a manufacturer and he relies on para 11 of the judgment in the case of Thermax Pvt. Ltd. -
“This aspect is provided for by section 3 (1) of the Customs Tariff Act which specifically mandates that the CVD will be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. In other words we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of duty that he would have been called upon to pay in that event. Thus if the person using the goods is entitled to the remission, the importer will be entitled to say that the CVD should only be the amount of concessional duty and, if he has paid more, will be entitled to ask for a refund.”
The crux of the problem has been answered by the observation of the Supreme Court in the said case in favour of the respondent.
6. No doubt Smt. Reena Arya emphasizes the fact about unjust enrichment. The doctrine of unjust enrichment in respect of captive consumption has been upheld by the Supreme Court in Solar Pesticides - but that judgment in our view will not be applicable to the instant case because the goods have not been sold to any person. The goods are used by the importer himself as a taxi. The goods are not captively consumed and sold. We are therefore of the view under the peculiar circumstances available in the facts of the case, the dictum laid down in the Solar Pesticides case cannot be made applicable to this case. In view of the above, we dismiss the appeals of the department and uphold the order passed by the Commissioner (Appeals).