Commissioner Of Customs (I & G) vs M/S U. T. Ltd
2008 Latest Caselaw 1441 Del

           THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment delivered on: 25.08.2008

+            CUS. A. C. 8/2008

COMMISSIONER OF CUSTOMS (I & G)                       ... Appellant

                                 - versus -

M/S U. T. LTD                                         ... Respondent

Advocates who appeared in this case:

For the Appellant : Ms Sonia Mathur

CORAM:-

HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE RAJIV SHAKDHER

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

1. This appeal under Section 130 A of the Customs Act, 1962 is

preferred by the Commissioner of Customs against the order passed by

the Customs, Excise & Service Tax Appellate Tribunal (Principal

Bench), New Delhi on 31.08.2007 in Customs Appeal 325/2007-SM

(BR).

2. The respondent had entered into a contract on 26.04.1999

with Air Headquarters, Vayu Bhawan, New Delhi for supply and

installation of a DTS system at a contracted price of Rs 81,89,000/-.

For the purposes of supply and installation of the said DTS system, the

respondent imported CCTV systems and filed a bill of entry dated

29.07.1999 classifying the said goods under the Customs Tariff

Heading 8530.80. However, the Assessing Officer was of the opinion

that the said CCTV systems ought to be classified under the Customs

Tariff Heading 8531.10. As a result of this, the respondent was

compelled to pay customs duty on the basis of the classification

insisted upon by the Assessing Officer. Consequently, the additional

customs duty paid in view of this change in classification was

Rs 4,43,496/-. Thereafter, the respondent challenged the said

classification by the Assessing Officer and the respondent's challenge

was ultimately found to be successful. The Department agreed with the

respondent that the classification for the imported CCTV systems had

been rightly done by the respondent under the Heading 8530.80.

3. In view of the above, the respondent, being entitled to a

refund, filed a refund application for the said excess duty paid to the

extent of Rs 4,43,496/-. The refund application was ultimately allowed

by the Deputy Commissioner (Refund). However, it was directed by

him that the amount be credited to the Consumers Welfare Fund as the

incidence of the duty had been passed on to the buyer, namely, the Air

Headquarters, Vayu Bhawan, New Delhi.

4. After considering the facts and circumstances of the case,

the Tribunal returned a finding that the Commissioner (Appeals) had

not disputed the fact that the respondent had collected only the

contracted amount as evident from the ledger, the invoice and the

contract. Consequently, the Tribunal arrived at the conclusion that the

finding of the Commissioner (Appeals) that the total amount received

by the respondent also included the amount of customs duty on the

goods at the time of importation was clearly without any basis. The

Tribunal was of the view that it was evident that the refund of excess

amount of duty paid by the appellant was beyond the contracted price.

Consequently, it was directed that the respondent be allowed the

consequential relief and the refund be made to it.

5. We are of the view that the finding arrived at by the Tribunal

cannot be interfered with for more than one reason. The first reason

being that no perversity in the said finding has been pointed out by the

learned counsel for the appellant. The second reason being that the

contract arrived at between the respondent and the Air Headquarters

was on 26.04.1999 for a price of Rs 81,89,000/-. This contracted price

was determined prior to the respondent making the import of the said

CCTV systems. The import was made subsequently as is evident from

the fact that the bill of entry is dated 29.07.1999. The respondent had

claimed classification under Customs Tariff Heading 8530.80 and if

that had been accepted by the Assessing Officer, the duty payable by

the respondent would have been Rs 15,82,705/-. The Assessing Officer

did not agree with the classification and compelled the respondent to

classify the said imported CCTV systems under the Customs Tariff

Heading 8531.10, as a result of which the respondent was compelled to

pay customs duty of Rs 20,26,201/-. The excess duty was to the extent

of Rs 4,43,496/-. If the respondent had passed on the incidence of this

excess duty, then the contracted price ought to have been increased by

this figure. But, we find that the contracted price remained

Rs 81,89,000/-. Therefore, the excess duty paid was clearly absorbed

by the respondent. It is obvious that in these circumstances, since the

incidence of the excess duty had not been passed on to the customer

(Air Headquarters), the respondent would be entitled to the refund.

6. We see no reason to interfere with the order passed by the

Tribunal. No substantial question of law arises for our consideration.

The appeal is dismissed.

BADAR DURREZ AHMED, J

RAJIV SHAKDHER, J August 25, 2008 SR