2016 (3) TMI 189 - AT - Customs

Rejection of refund claim of SAD - Additional duty of customs in terms of Notification No. 102/2007-Cus dated 14.09.2007 - Appellant imported goods on 21.04.2013 and filed Bill of Entry on 23.04.2013 which was released by the Customs on 26.04.2013. The refund was rejected as the imported goods were shown as sold 5 days before on release by the Customs but appellant submitted that the delivery was made as per delivery challan on 29.04.2013 which is after the date of bill of entry - Held that the appellant has submitted delivery challan and the other evidence along with the terms of agreement which establish that the issue of invoice 5 days before the release of the goods by the Customs by itself does not prove that the goods have been sold and delivered to the buyers. It is also seen that the appellant has filed reconciliation certificate with calculation sheet certified by a Chartered Accountant containing details of Bills of Entry and sale invoices and payment of VAT/CST. Therefoer, refund claim can not be rejected. - Decided in favour of appellant

Summary

Issues:
Refund claim for additional duty of customs rejected due to invoice date preceding the release of goods by Customs.

Analysis:
The appellant, engaged in importing and selling electronic items, had a refund claim for additional duty of customs. The claim was partially rejected by the Original Authority, leading to an appeal before the Commissioner of Customs (Appeals). The rejection was primarily based on the fact that the appellant issued a sales invoice dated 21.04.2013 for goods released by Customs on 26.04.2013, indicating a sale before the release of goods. The Commissioner (Appeals) upheld the rejection, prompting the appellant to appeal further.

The appellant argued that the sale occurred as per the invoice date, but the delivery was made later as per the delivery challan dated 29.04.2013. They cited a Master Supply Agreement stating that invoices are raised once goods are ready for shipment, not necessarily upon release by Customs. The appellant contended that issuing an invoice before delivery is permissible under the agreement. The appellant also provided evidence, including a reconciliation certificate and calculation sheet certified by a Chartered Accountant, to support their claim fulfillment as per the relevant notification.

The Department, represented by the Ld. AR, reiterated the lower authorities' findings, emphasizing that an invoice issued before the release of goods should indicate that the imported goods were not sold on VAT payment. However, upon reviewing the appeal records and submissions from both parties, the Tribunal found that the rejection of the refund was solely based on the invoice date preceding the Bill of Entry date. The Tribunal noted the appellant's evidence, including the delivery challan, terms of the agreement, and reconciliation certificate, which indicated compliance with the notification requirements. The Tribunal concluded that the rejection based on the invoice date alone was not justified, as the evidence presented by the appellant established that the goods were not necessarily sold before release by Customs. Therefore, the Tribunal allowed the appeal, deeming the rejection unsustainable.

In conclusion, the Tribunal overturned the rejection of the refund claim, emphasizing that the mere issuance of an invoice before the release of goods does not conclusively prove a sale. The decision highlighted the importance of considering all relevant evidence and contractual terms in assessing refund claims related to customs duties.