2015 (12) TMI 921 - AT - Customs

Refund of SAD - whether importer has passed on 4% SAD to the buyers as evident from certified copy of Excise invoices and RG 23 extract - Held that - In addition to CVD there is mention of 4% SAD also. However, on the same invoices there is stamp affixed which indicates as no credit of additional duty levied under Section 3(5) of the Customs Tariff Act 1975 shall be admissible. I also perused certificate issued by the buyers of the goods wherein it is certified that the buyers have availed Cenvat credit in respect of CVD and Education Cess thereto and it also certified that Cenvat Credit of Special Additional Duty (4%) have not been availed. These certificates have been attested by the Jurisdictional Range Office - appellant has neither passed on Cenvat credit of 4% SAD to the buyers nor the buyers have availed Cenvat credit of SAD. I am of the view that as per the notification 102/2007-Cus and Board Circular prescribed the procedure. The only requirement, as regards Cenvat credit is that the claimant should make endorsement on the invoice that the Cenvat credit in respect of additional duty should not be availed by the buyers. The said compliance was undisputedly made by the appellant on their sale invoices. In view of the above discussions on the facts which is not under dispute, I am of the view that the refund of ₹ 5,51,761/- is admissible to the appellant. - Decided in favour of assessee.

Summary

Issues:
Refund claim of 4% SAD, rejection of claim by adjudicating authority, appeal before Commissioner of Customs (Appeals), rejection of appeal, admissibility of refund.

Detailed Analysis:

1. Refund Claim of 4% SAD:
The appellant filed a refund claim of Rs. 18,52,267 for 4% Special Additional Duty (SAD) paid on imported goods under specific bills of entry. The adjudicating authority sanctioned a partial refund of Rs. 13,00,507 but rejected Rs. 5,51,761, alleging the appellant passed on the SAD to buyers based on evidence from Excise invoices and RG 23 extract.

2. Rejection of Claim and Appeal:
The Commissioner of Customs (Appeals) upheld the rejection of the claim for Rs. 5,51,761, leading to the appellant filing an appeal challenging this decision. The appellant argued that the Cenvat credit of 4% SAD was neither passed on to buyers nor availed by them, supported by stamp on invoices and certificates from buyers confirming non-availment of the credit.

3. Arguments and Submissions:
The appellant's counsel highlighted that despite mentioning 4% SAD in invoices, a stamp indicated no credit shall be admissible, and buyer certificates verified non-availment of SAD credit. The RG 23 register of buyers showed credit only for CVD and related Cess, not for SAD. The Revenue's representative reiterated the findings of the impugned order, emphasizing the mention of SAD in appellant's invoices.

4. Judicial Review and Decision:
The Member (Judicial) carefully reviewed submissions and records, noting the conflicting claims regarding the passing on of SAD credit. The analysis of invoices, buyer certificates, and RG 23 registers revealed that the appellant did not pass on the SAD credit, and buyers did not avail it. Referring to relevant notifications and circulars, it was concluded that the appellant complied with the necessary procedures by endorsing invoices to prevent SAD credit availment by buyers.

5. Final Decision and Relief:
Based on the undisputed facts and legal requirements, the Member (Judicial) found the refund of Rs. 5,51,761 admissible to the appellant. The appeal was allowed, with directions for consequential relief as per the law. The judgment clarified the compliance with Cenvat credit procedures and upheld the appellant's entitlement to the refund amount, resolving the dispute in favor of the appellant.