2018 (9) TMI 1289 - AT - Customs

Refund of SAD - N/N. 102/2007-Cusdated 14.09.2007 - Board Circular No.16/2008-Cus dated 13.10.2008 - Held that - It is well settled law that no extraneous conditions can be introduced in the notification by the Executive by way of any circular. The only condition of the notification is that VAT should be paid on the resold goods which condition stand satisfied by the appellant. The fact that the said condition 2(d) uses expression importer cannot be interpreted in a manner that VAT should be paid from the importer s pocket only. The payment of VAT on the imported goods is the substantive condition of the Notification and the same having been paid by the consignment agent would satisfy the said condition of the notification. The Adjudicating Authority has referred to the Chartered Accountant s certificate clarifying that the appellant has reimbursed the VAT amount to his consignment agent and the Revenue has not produced any evidences to rebutt the above findings of the Adjudicating Authority. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim of additional duty on imported goods based on VAT payment by consignment agent; Interpretation of Notification No. 102/2007-Cus dated 14.09.2007; Introduction of conditions by Circular No.16/2008-Cus dated 13.10.2008; Reimbursement of VAT to consignment agent by importer; Judicial review of Revenue's appeal against refund claim.

Analysis:
The case involved a dispute over a refund claim of additional duty on imported goods. The appellant imported Aluminum Scrap and paid the necessary Customs duty and countervailing duty. The appellant filed a refund claim of additional duty based on subsequent sales of the imported goods with appropriate VAT payment by the consignment agent. The Deputy Commissioner initially approved the refund claim after verifying the Chartered Accountant's certificate confirming VAT payment and reimbursement by the importer to the consignment agent.

The Revenue, however, appealed the decision to the Commissioner (Appeals), who overturned the refund claim citing non-compliance with conditions specified in Notification No. 102/2007-Cus dated 14.09.2007 and Circular No.16/2008-Cus dated 13.10.2008. The Commissioner emphasized that VAT payment should be made by the importer directly, not the consignment agent. The appellant challenged this decision on the grounds that the Circular introduced additional conditions not present in the original notification.

The Tribunal analyzed the case and found that the Circular's requirement for certification by a Chartered Accountant regarding VAT payment and reimbursement was not part of the original notification. The Tribunal emphasized that the only condition in the notification was the payment of VAT on resold goods, which the appellant had fulfilled through the consignment agent. The Tribunal highlighted that the Executive cannot introduce extraneous conditions through circulars and that the importer's payment of VAT was the substantive requirement.

Moreover, the Tribunal noted that the Adjudicating Authority's finding of VAT reimbursement by the importer to the consignment agent was supported by the Chartered Accountant's certificate, which the Revenue failed to refute with evidence. Consequently, the Tribunal set aside the Commissioner (Appeals) decision, reinstating the Original Adjudicating Authority's order to grant the refund claim. The judgment clarified the strict interpretation of conditions in notifications and the importance of factual accuracy in judicial decisions.