2018 (6) TMI 486 - AT - Customs

SAD Refund - N/N. 102/2007 dated 14.9.2007 as amended - unjust enrichment - case of Revenue is that the amount was not shown as receivables in the balance sheet for the financial year 2007 2008 when the goods were imported - Held that - The refund claim is filed under N/N. 102/2007 which allows the importer to file refund claim of SAD on producing evidence that VAT has been discharged on sale of the imported goods. This being so, it cannot be insisted that the respondents have to show the CVD as receivables immediately after the import of the goods - refund rightly allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claim for SAD under Notification No.102/2007 - Unjust enrichment test not satisfied - Chartered Accountant's certificate - Appeal against rejection of refund claim - Compliance with Circular No. 7/2008-Cus. - Requirement of VAT discharge on sale of imported goods - Showing CVD as receivables in balance sheet - Commissioner (Appeals) direction for refund sanction - Appeal by department.

Analysis:
The case involved a refund claim for Special Additional Duty (SAD) under Notification No.102/2007, where the issue of unjust enrichment test not being satisfied was central. The original authority rejected the refund claim based on this ground, prompting an appeal by the department. The department argued that the Chartered Accountant's certificate provided by the respondent was insufficient to establish that the duty incidence had not been passed on to another party. The certificate indicated that the burden of 4% SAD had not been transferred to the buyer and was shown as recoverable in the respondent's books of accounts. The department contended that since the amounts were not shown as receivables in the relevant financial year, the test of unjust enrichment was not met, questioning the Commissioner (Appeals) decision to order refund sanction.

On the other hand, the respondent's counsel argued that the Circular No. 7/2008-Cus., which was cited for the unjust enrichment test, applied to normal refund of customs duty and interest under section 27 of the Customs Act, not specifically to SAD refunds covered by Notification No. 102/2007. To support their claim, the respondent had submitted the required certificate from the Chartered Accountant and a self-declaration, as per the conditions prescribed. The respondent contended that showing the amounts as receivables in the balance sheet immediately after import was not a mandatory requirement, and it was sufficient to demonstrate it in the subsequent financial year after the sale of goods in India. The respondent relied on the Equinox Solutions Ltd. case to support their argument.

Upon hearing both sides, the Tribunal noted that the essential issue was whether the amounts were shown as receivables in the balance sheet for the financial year when the goods were imported, as raised by the department. However, since the refund claim was made under Notification No. 102/2007, which mandated evidence of VAT discharge on sale of imported goods, the immediate showing of CVD as receivables was not a strict requirement. The Tribunal upheld the Commissioner (Appeals) decision, emphasizing that the Chartered Accountant's certificate and self-declaration were duly provided, and there was no merit in the department's contentions. Consequently, the appeal by the department was dismissed, affirming the refund sanction direction by the Commissioner (Appeals).