2010 (1) TMI 1090 - Commissioner - Customs

Issues Involved:

1. Whether the imported goods were intended for subsequent sale.
2. Whether the appellant paid and bore the incidence of Special Additional Duty (SAD).
3. Whether the invoice format used by the appellant was legally compliant.
4. Whether the appellant provided sufficient evidence of VAT payment.
5. Whether procedural lapses should prevent the grant of refund under Notification No. 102/2007-Cus.
6. Whether the appellant is entitled to interest on the delayed refund.

Issue-wise Detailed Analysis:

1. Intended Purpose of Imported Goods:

The Assistant Commissioner held that the appellant did not import the goods for subsequent sale, as they were initially intended for mining activities. However, the appellant argued that due to global recession, they could not use the machines and decided to sell them to their sister concern, Sujata Resources Pvt. Ltd., after paying the requisite customs duties, including SAD. The appellant relied on the Tribunal's decision in Ramsons Garments Finishing Equipments Pvt. Ltd. v. CCE, Bangalore, which interpreted "for use" as "intended for use" rather than "actually used." The adjudicating authority accepted this interpretation, allowing the sale under Notification No. 102/2007-Cus.

2. Payment and Incidence of SAD:

The Assistant Commissioner noted that the duties were paid by Sujata Resources Pvt. Ltd., not the appellant. However, the appellant contended that raising credit/debit notes is a common business practice and should be accepted unless proven otherwise. The records showed that the appellant paid the customs duties and interest, and issued credit notes to Sujata, indicating that they bore the SAD incidence. The adjudicating authority concluded that the appellant did not enrich themselves twice and was entitled to the refund.

3. Invoice Format Compliance:

The Assistant Commissioner rejected the refund claim partly because the invoice did not bear a serial number and was prepared on the appellant's letterhead. The appellant argued that no specific format for invoices is prescribed by the Central Excise Rules or CBEC, and their invoice contained all required particulars. The adjudicating authority found that the invoice included necessary details such as value, duties, and machine description, and thus, the format should not hinder the refund claim.

4. Evidence of VAT Payment:

The Assistant Commissioner rejected the refund claim due to the lack of proper evidence of VAT payment. The appellant provided a copy of Form 210, showing a VAT payment of Rs. 70,88,867/-. The adjudicating authority noted that Form 210 is a prescribed challan under the Maharashtra Value Added Tax Act, 2002, and the payment was made to the Bank of Maharashtra. The adjudicating authority concluded that the appellant fulfilled the requirement of proving VAT payment.

5. Procedural Lapses and Substantial Benefit:

The adjudicating authority emphasized that procedural lapses, such as the invoice not bearing a serial number or not producing a duplicate copy, should not prevent the grant of substantial benefits like the refund claim. The appellant fulfilled the conditions of Notification No. 102/2007-Cus., including the payment of SAD and VAT and the endorsement on the invoice that no credit would be available to the buyer.

6. Interest on Delayed Refund:

The appellant claimed interest on the delayed refund based on equity, justice, and conscious. The adjudicating authority noted that payment of interest under Section 27A of the Customs Act, 1962, is automatic, and thus, the appellant was entitled to interest on the delayed refund.

Conclusion:

The appeal was allowed with consequential benefits, setting aside the impugned order passed by the Assistant Commissioner, Central Excise, Ratnagiri. The adjudicating authority concluded that the appellant fulfilled all conditions for the refund under Notification No. 102/2007-Cus. and was entitled to the refund and interest on the delayed payment.

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