2014 (6) TMI 413 - AT - Customs

Refund of SAD - appellants are being traders, sold the goods in the open market after charging VAT with an endorsement that CENVAT credit of SAD is not available to the buyers of the goods - notification no. 102/07-Cus - commissioner (appeals) denied the refund by observing that, as the amount of SAD has shown as recoverable only after the sale takes place - Held that - Commissioner (Appeals) held that the appellants have shown the amount recoverable on account of SAD after sale has been effected, is not correct. In fact, without effecting the sale, the amount of refund of SAD available to the applicant was not known. Therefore, the observations of the learned Commissioner (Appeals) are totally irrelevant and incorrect. As the appellant has fulfilled the condition of notification 102/07-Cus and also have been able to prove that the amount of SAD has not passed on the buyer by way of a certificate issued by the Chartered Accountant and an undertaking given by them. In these circumstances, I hold that the appellants are entitled for refund of claim of SAD. In these circumstances, the impugned orders are set aside - Decided in favour of assessee.

Summary

Issues:
Refund of Special Additional Duty (SAD) denied by lower authorities.

Analysis:
The appellants imported goods and sold them in the open market after charging VAT, with an endorsement that CENVAT credit of SAD is not available to buyers. Initially, the refund claim was denied by the adjudicating authority due to a lack of proof of nexus between the imported goods and the bills of entry. On appeal, the Commissioner (Appeals) noted that under the relevant notification, no nexus between importation and sale was required, only that the goods be sold with VAT/CST payment and a specific endorsement regarding SAD credit. However, the Commissioner (Appeals) wrongly concluded that the refund claim was not valid as the amount of SAD was shown as recoverable only after the sale, which was deemed incorrect by the appellate judge.

The appellate judge found that the Commissioner (Appeals) had gone beyond the issue at hand by suggesting that the appellants needed to show the recoverable amount of SAD before the sale, which was not a requirement under the notification. The judge emphasized that the appellants had met the conditions of the notification and demonstrated that the SAD amount had not been passed on to the buyers, supported by a certificate from a Chartered Accountant and an undertaking. Consequently, the judge held that the appellants were entitled to the refund of SAD and set aside the impugned orders, allowing the appeals with any consequential relief. The adjudicating authority was directed to implement the order within 30 days.