2016 (7) TMI 362 - AT - Customs

Refund of SAD - Notification No.102/2007-Cus. Dated 14.9.2007 - The claims were disallowed on the ground that the said duty element appears to have been passed on to the consumer which is in violation of the said Notification. - Held that - The facts of the case as available on record reveals that the invoice mentions the price of the goods and VAT on the same along with the endorsement as reproduced above. We find that based on such invoice no credit of SAD can be availed by the buyer. The verification as alleged by Revenue is neither categorical nor to the point of credit available on duty paid under section 3(5) of the Tariff Act. Even if there is no endorsement regarding non-admissibility of credit, refund cannot be denied if there is no allegation with supported evidence regarding actually passed on credit and the availment thereof by the buyer. - Refund allowed - Decided in favor of assessee.

Summary

Issues:
Refund claim under Notification No.102/2007-Cus disallowed due to alleged passing on of duty to consumer.

Analysis:
The appellant imported PVC resins and paid Additional Duty of Customs under section 3(5) of Customs Tariff Act, 1975, subsequently filing a claim for refund under Notification No.102/2007-Cus. The claims were rejected on the basis that the duty had been passed on to the consumer, violating the notification. The sales invoice contained an endorsement stating no benefit of the duty was passed on. The Commissioner (Appeals) upheld the rejection, relying on the same rationale.

The appellant argued that the sales invoice clearly indicated only the value of the items and VAT, with no mention of the duty paid, thus complying with the notification for refund. The appellant contended that the rejection was unjustified.

The Revenue's representative countered the appellant's argument by stating that there was at least one instance where a buyer could avail credit, suggesting the endorsement should be more explicit as per the notification's wording.

The Tribunal deliberated on whether the duty was passed on to the buyer for credit, thus disallowing the refund. The invoice showed the item price, VAT, and an endorsement indicating no benefit passed on. The Tribunal found that based on the invoice, the buyer could not claim credit for the duty. The Tribunal referenced a previous case where it was established that without evidence of credit being passed on, refund denial was unwarranted.

After considering the arguments and evidence, the Tribunal found merit in the appeals and directed the original authority to review the documents and process the refund claim in accordance with the law. Consequently, all four appeals were allowed with the specified direction.