2018 (8) TMI 708 - AT - Customs

Refund of SAD - rejection on the ground that the appellant was unable to establish that the incidence of duty had not been passed on to their customers - Held that - It is seen from the tax invoice that no portion of the price recovered from the customers was stated to include special additional duty collected as countervailing duty at the time of import. It is also clear that there is a Chartered Accountant s certificate to the effect that the incidence of duty has not been passed on. It is but natural that proceeds of sale would be reflected in the books as receipts earned from sale. The impugned order has erred in upholding the rejection of the refund claim without adequate justification - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for refund of special additional duty on imported goods rejected by lower authorities.

Analysis:
The case involved an appeal by M/s Giriraj Steel against the rejection of their claim for refund of special additional duty on goods imported in 2007-08. The Commissioner of Customs (Appeals), Mumbai - I, had rejected the claim stating that the appellant failed to prove that the duty incidence was not passed on to their customers, as required by section 27 of the Customs Act, 1962. The rejection was upheld by the first appellate authority, leading to the present appeal before the Appellate Tribunal CESTAT Mumbai.

During the proceedings, the Authorized Representative for the appellant referred to tax invoices to demonstrate that the special additional duty was not recovered from customers. The representative also cited precedents like Bharat Kumar Indrasen Trading Pvt Ltd and Suvee Impex Pvt Ltd to support their argument.

On the other hand, the Authorized Representative for Revenue supported the rejection of the refund claim, highlighting a certificate from a Chartered Accountant indicating that the duty paid would be treated as income upon refund.

The Tribunal observed that the Chartered Accountant's certificate was deemed unacceptable by lower authorities due to the treatment of the duty amount in the profit and loss account without provision for the refund as receivables. The Tribunal noted that the tax invoices did not show any portion of the price as including the special additional duty collected during import. Additionally, a Chartered Accountant's certificate confirmed that the duty incidence had not been passed on.

The Tribunal concluded that the lower authorities erred in upholding the rejection of the refund claim without sufficient justification. Therefore, the impugned order was set aside, and the appeals by M/s Giriraj Steel were allowed with consequential relief. The judgment was pronounced in court on 30/07/2018.