2012 (12) TMI 475 - AT - Customs

Import - Refund of Special Additional Duty on the ground that the same was sold by them in India after payment of value added tax (sales tax) under Notification No. 102/2007 denial of refund Held that - No endorsement in some of the invoices that no credit of SAD/CVD can be taken based on such invoices - non-submission of original documents - second circular dated 13.10.2008, the Board had clarified that soft copies of invoices and copies of challans can be accepted - second circular issued by the Board has not been taken into account by the lower authorities - ground on the basis of which refund claims have been rejected is failure to submit VAT returns - copies of VAT returns have not produced, the learned counsel submitted that returns were produced - matter remanded to the original adjudicating authority

Summary

Issues involved:
- Rejection of refund claims based on the chartered accountant's certificate.
- Lack of endorsement in invoices regarding SAD/CVD credit.
- Non-submission of original documents.
- Failure to submit VAT returns.

Analysis:

Issue 1: Rejection of refund claims based on the chartered accountant's certificate:
The appellant submitted seven claims for refund of Special Additional Duty paid on imported goods, which were rejected. The rejection was primarily based on the chartered accountant's certificate not meeting the requirements set by Circular No. 6/2008 Cus. The certificate stated that the procedures performed did not constitute an audit or review according to generally accepted audit standards. However, it was argued that the certificate was prepared in line with the circular issued by the Board and was sufficient. The Tribunal noted that subsequent circulars clarified procedural requirements and relaxed certain conditions. The second circular did not mandate the CA to explain how the burden of duty had not been passed on, contrary to the first circular. The Tribunal found the CA certificate complete as it confirmed compliance with essential conditions of Notification No. 102/2007 Cus., despite not meeting audit standards. The rejection based on the incomplete CA certificate was deemed unsustainable.

Issue 2: Lack of endorsement in invoices regarding SAD/CVD credit:
Another ground for rejection was the absence of an endorsement in some invoices regarding the inability to take credit for SAD/CVD. The appellant argued that since SAD/CVD was not separately shown in commercial invoices, the lack of endorsement should not lead to denial of refund. Citing a Tribunal decision supporting this stance, the Tribunal decided to remand the claims for fresh consideration. The original authority was directed to consider the Tribunal's decision, relevant provisions, and documents to reach a lawful conclusion.

Issue 3: Non-submission of original documents:
The third issue raised was the non-submission of original documents, with the appellant contending that soft copies of invoices and challans were acceptable as per a second circular by the Board. The lower authorities had not considered this circular, prompting the need for a remand to evaluate the issue in line with the circular's provisions on document copies.

Issue 4: Failure to submit VAT returns:
Lastly, the refund claims were rejected due to the alleged failure to submit VAT returns. The appellant claimed that the returns were indeed provided, and they committed to submitting all copies for verification during fresh consideration. As the matter was being remanded for a reevaluation, the opportunity to present VAT returns for verification was reserved for the appellant during the de novo adjudication process.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a comprehensive reassessment of all refund claims, considering the observations made in the judgment and ensuring the appellant's right to present their case adequately before a final decision is reached.