ORDER Ashok Bhan and Dalveer Bhandari, JJ.
1. Assessee-Appellant (hereinafter referred to as the "Assessee") imported watch parts for use in the manufacture of wrist watches. Import duty in the sum of Rs. 11,79,199 was imposed. Assessee did not deposit the import duty in cash but made a debit in the Duty Entitlement Pass Book (for short "DEPB"). Some of the parts imported were found to be defective/unusable. Assessee applied for re-exporting the same which was allowed. After re-export, Assessee filed a claim for duty drawback of Rs. 11,79,199 under Section 74 of the Customs Act, 1962.
2. A show cause notice was issued to the Assessee as to why the duty drawback claimed be not rejected on the ground that the goods were not easily identifiable. Reply to the show cause notice was given.
3. The authority-in-original vide his order dated, 13th October, 1999 rejected the claim of the Assessee on the ground that the goods were not identifiable on physical examination. Being aggrieved, Assessee filed an appeal before the Commissioner (Appeals). Commissioner(Appeals) by his order dated, 14th February, 2000 accepted the appeal and remanded the matter to the assessing officer for de nove consideration.
4. A second show cause notice was issued proposing to deny the duty drawback claim. In addition to the ground regarding identification of parts, an additional ground was taken in the second show cause notice as to why the duty drawback claim be not rejected as the Appellant had not paid the duty in cash but by way of debit in DEPB. A detailed reply was submitted.
5. The Assessing Authority by his order dated, 25th July, 2000 held, that parts were identifiable as the central excise authorities had certified identity of parts. He, however, rejected the claim of duty drawback on the ground that the Assessee had not paid the duty in cash but by way of debit in DEPB.
6. Assessee, being aggrieved, filed appeal before the Commissioner(Appeals). Before the Commissioner(Appeals), representative of the Assessee submitted that they are not pressing the claim of duty drawback. However, as the goods had been re-exported, a request was made to issue a certificate which would enable them to approach the Director General of Foreign Trade to obtain a new DEPB book/re-crediting the debit made in DEPB book.
7. For this reliance was placed by them upon the Public Notice No. 16 (RE.00)/1997-2000 dated, 30th June, 2000 wherein following paragraph 7.50A was inserted w.e.f. 30th June, 2000 in the Hand Book (Vol.1)(RE.00) 1997-2000 which is reproduced below:
7.50A Re-export of goods imported under DEPB Scheme: Goods imported under DEPB scheme, which are found defective or unfit for use, may be re-exported, as per the guidelines issued by the Department of Revenue. In such cases 98 per cent of the credit amount debited against DEPB for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original DEPB. Based on the Certificate, a fresh DEPB shall be issued by the concerned Licensing Authority. The fresh DEPB, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period of validity of the DEPB against which such goods were imported.
8. The Appellate Authority rejected the prayer of the Assessee for issuance of a certificate on the ground that Public Notice dated, 30th June, 2000 would not be applicable to the case of the Assessee as the imported parts were re-exported vide shipping bill dated, 16th July, 1999, i.e., prior to the issuance of the public notice dated, 30th June, 2000.
9. Assessee thereafter filed a revision before the Joint Secretary, Government of India under Section 129DD of the Customs Act, 1962 which was rejected. Appellant then filed a writ petition in the High Court which has been dismissed by the impugned Order.
10. It is a cardinal principle of law, which has been settled by a Bench of seven Judges of this Court in the case of Mafatlal Industries Ltd. v. Union of India , that refund of a claim made by the Assessee can be denied on the principle of undue enrichment if the Assessee has passed of the burden to the consumers. This principle would be equally applicable to the Revenue as well as it cannot have the double advantage. Applying the same principle, Revenue cannot be allowed to enrich itself by denying the duty drawback as well as by refusing adjustment of duty paid by way of debit in DEPB. Admittedly, in this case the parts imported by the Assessee were re-exported. Once the imported parts which were found to be defective/unusable are re-exported, Assessee became entitled to either refund of the duty, if paid in cash or adjustment of the duty if paid by way of debit in DEPB book either by reversing the entry or by issuing a fresh DEPB book, as provided in the public notice dated, 30th June, 2000. Public Notice dated, 30th June, 2000 is procedural in nature and it does not make any substantive change in the policy. Procedural laws cannot be equated with substantive laws. Substantive laws are generally not retrospective unless specified to the contrary by the Legislature. Insofar as procedural laws are concerned, they may be retrospective unless shown to the contrary. Otherwise also, once the imported parts which were found to be defective are re-exported, Assessee under the policy itself without reference to the public notice would be entitled for adjustment of the duty paid by way of adjustment in DEPB. The Revenue cannot be permitted to take the stand that it would not refund the duty as it was not paid in cash or deny the adjustment in DEPB book after the goods have been re-exported.
11. For the reasons stated above, we accept this appeal and direct the authorities to issue a Certificate to the Assessee to enable them to approach DGFT to obtain a new DEPB book or re-credit the adjustment of duty in the earlier DEPB book.