2013 (11) TMI 703 - AT - Customs

Stay application - Refund claim - Import of diagnostic equipments - Refund of SAD in terms of Notification No. 102/2007-Cus., dated 14-9-2007 - Unjust enrichment - Held that - Commissioner (Appeals), by passing the impugned order, was implementing the purport of Notification No. 102/2007-Cus., as clarified in the circular of the Board. In this view of the matter, there can be no stay of operation of his order - Prima facie case not in favour of Revenue - Stay on refund denied.

Summary

Issues:
Stay of operation of appellate Commissioner's order regarding refund of Special Additional Duty (SAD) due to unjust enrichment.

Analysis:

Issue 1: Stay of operation of appellate Commissioner's order

The Department filed an application seeking a stay of the appellate Commissioner's order granting certain refunds to the respondent. The respondent had imported goods and claimed a refund of Special Additional Duty (SAD) under Notification No. 102/2007-Cus., subject to the condition of paying appropriate Sales Tax/VAT in India. The rejection of the refund claim was based on the grounds of unjust enrichment, as the evidence presented by the respondent was not accepted as proof of SAD being retained. The Department argued that the respondent failed to disprove unjust enrichment as per Section 28D of the Customs Act.

Issue 2: Interpretation of Notification No. 102/2007-Cus. and relevant circular

The respondent contended that the exemption from SAD was granted by the Central Government through the refund mechanism under Notification No. 102/2007-Cus., as amended. They referred to Circular No. 6/2008-Cus., which clarified the legislative intent behind the notification. The Circular specified the requirement of showing payment of appropriate Sales Tax/VAT/CST for intra/inter-state sales of imported goods to claim the refund. It also allowed the use of a Chartered Accountant's Certificate to demonstrate tax payments due to the voluminous nature of records involved in such transactions.

Issue 3: Compliance with legislative intent and circular

Upon reviewing the materials, the Tribunal found that the appellate Commissioner's order was in line with the purport of Notification No. 102/2007-Cus. and the clarifications provided in Circular No. 6/2008-Cus. regarding the conditions for claiming the SAD refund. Consequently, the Tribunal concluded that there was no basis for staying the operation of the appellate Commissioner's order, as it aligned with the legislative intent and procedural requirements outlined in the circular.

Conclusion:

The Tribunal dismissed the Department's application for a stay of the appellate Commissioner's order, emphasizing that the order was consistent with the provisions of Notification No. 102/2007-Cus. and Circular No. 6/2008-Cus. The decision was based on the proper interpretation of the legislative intent behind the refund mechanism for SAD and the procedural guidelines set forth in the circular, ultimately leading to the rejection of the application for stay.