2015 (10) TMI 1721 - AT - Customs

Rejection of refund claim Special Additional Duty Primary adjudicating authority rejected refund claim of respondent on ground that respondent had taken credit of SAD and therefore was ineligible for refund thereof in terms of Notification No.102/2007-Cus Commissioner by disagreeing with view of adjudicating authority, remanded case back to process, quantify and sanction refund Held that - Order of Commissioner amounts to remanding case to primary adjudicating authority which Commissioner is not empowered to do However, merely because respondent took credit of SAD does not ipso facto amounts of passing it on to its buyers and deprive it from claiming refund thereof if conditions contained in Notification No.102/2007-Cus are satisfied In light of analysis court remand case to Commissioner to decide it afresh at his level and determine amount of refund admissible Decided partly in favour of revenue.

Summary

Issues:
Refund claim rejection based on SAD credit in RG 23D account, Commissioner (Appeals) order remanding the case, scrutiny of sample invoices for passing on SAD benefit, power of remand by Commissioner (Appeals), conditions under Notification No.102/2007-Cus for refund eligibility.

Refund Claim Rejection:
The appeal was filed by Revenue against the rejection of the refund claim by the primary adjudicating authority for the respondent, an importer and dealer of goods, due to taking credit of SAD in the RG 23D account, making them ineligible for the refund as per Notification No.102/2007-Cus. The Commissioner (Appeals) disagreed with the primary authority, noting that the invoices did not show the amount of Additional Duty of Customs, and the benefit of SAD was not actually passed on to the buyers.

Commissioner (Appeals) Order Remand:
The Revenue appealed the Commissioner (Appeals) decision, arguing that the finding was based on a scrutiny of sample invoices only, and the power of remand by the Commissioner (Appeals) was no longer valid post an amendment to the Customs Act. The Tribunal found that the Commissioner (Appeals) remanded the case to the primary authority, which was not within their power, citing a Supreme Court judgment. However, the mere fact of taking SAD credit in the RG 23D register did not automatically mean passing it on to buyers, allowing the refund if conditions under Notification No.102/2007-Cus were met.

Scrutiny of Invoices and SAD Benefit:
The respondent argued that the Superintendent's letter regarding passing on SAD benefits was for different bills of entry, not the ones for the refund claim. They maintained that the declaration on invoices stated SAD credit was not available for the goods in question. The Tribunal noted the importance of scrutinizing all relevant records for refund cases to ensure compliance with conditions.

Power of Remand by Commissioner (Appeals):
The Tribunal clarified that the Commissioner (Appeals) could not remand the case to the primary authority, as demonstrated in a previous Supreme Court judgment. They emphasized the need to fulfill the conditions of Notification No.102/2007-Cus for refund eligibility, irrespective of SAD credit in the RG 23D register.

Conditions under Notification No.102/2007-Cus:
Ultimately, the Tribunal remanded the case to the Commissioner (Appeals) for a fresh decision without sending it back to the primary adjudicating authority. They directed the Commissioner (Appeals) to determine the admissible refund amount based on a thorough review of all relevant records and grant the refund accordingly, providing the respondent with an opportunity to present their case. The Tribunal set a timeline of three months for the completion of the proceedings.