2018 (11) TMI 1098 - AT - Customs

Refund of SAD - rejection on the ground of non-mentioning of the fact of ineligibility of 4% SAD in the respective sales invoices - alleged violation of N/N. 102/2007-CUS dt. 14.9.2007 - Held that - The issue is settled in favour of the respondent by the Larger Bench in Chowgule & Company Pvt. Ltd. 2014 (8) TMI 214 - CESTAT MUMBAI (LB) , where it was held that Condition relating to endorsement on the invoice was merely a procedural one and the purpose and object of such an endorsement could be achieved when the duty element itself was not specified in the invoice. Unjust enrichment - Held that - In the Chartered Accountant s Certificate produced by the Appellant it has been clearly stated that the amount claimed as refund has been shown in their books of account as receivable and the same has not been passed on to the buyers - No contrary evidence has been produced by the Revenue to contradict the said certificate nor the findings of the Ld. Commissioner(Appeals) has been rebutted with material particulars. Refund is to be allowed - Appeal dismissed - decided against Revenue.

Summary

Issues:
- Compliance with conditions of Notification No.102/2007-Cus regarding refund claims of Special Additional Duty of Customs
- Burden of proof regarding passing on the duty claimed as refund to customers
- Application of judgment in Proflex Systems case
- Unjust enrichment

Compliance with Notification No.102/2007-Cus:
The appeal involved a dispute regarding the compliance with conditions of Notification No.102/2007-Cus for refund claims of Special Additional Duty of Customs. The Revenue contended that the respondent failed to mention in sales invoices that no credit of the Additional Duty of Customs shall be admissible, thus violating the notification. However, the advocate for the respondent argued that the issue was settled in favor of the assessee by the Larger Bench of the Tribunal in a previous case. The Tribunal observed that non-declaration of the duty in the invoice itself affirmed that no credit would be available, satisfying the condition prescribed under the notification. This interpretation was supported by judgments of the Madras High Court and the Karnataka High Court, which upheld similar reasoning. Consequently, the Tribunal dismissed the Revenue's appeal on this ground.

Burden of Proof on Passing on Duty to Customers:
The Revenue also raised concerns about the respondent's failure to prove that the burden of the Special Additional Duty claimed as a refund had not been passed on to their customers. The advocate for the respondent presented a Chartered Accountant's certificate indicating that the refund claim was shown as receivable in their books of account, demonstrating that the burden had not been transferred. The Tribunal noted that no contrary evidence was produced by the Revenue to challenge the certificate, and the findings of the Commissioner (Appeals) were not rebutted with substantial details. Consequently, the Tribunal found no merit in the Revenue's contention on this issue.

Application of Proflex Systems Case:
The advocate for the respondent distinguished the present case from the Proflex Systems case, emphasizing that the imported goods were not subjected to further processing and were sold as they were imported. This distinction was crucial as the judgment in the Proflex Systems case deemed the refund of Special Additional Duty inadmissible due to further processing of the goods. The advocate supported their argument with relevant tax invoices showing the nature of the imported goods and their subsequent sale. The Tribunal accepted this distinction and did not apply the judgment of the Proflex Systems case to the present scenario.

Unjust Enrichment:
Regarding the issue of unjust enrichment, the Tribunal considered the Chartered Accountant's certificate provided by the respondent, which clearly stated that the amount claimed as a refund had not been passed on to the buyers and was shown as receivable in their books of account. The Tribunal found no evidence contradicting this certificate presented by the Revenue, nor were the Commissioner (Appeals)'s findings rebutted with substantial evidence. Consequently, the Tribunal did not find merit in the Revenue's argument concerning unjust enrichment.

In conclusion, the Tribunal dismissed the Revenue's appeals based on the settled interpretation of the notification conditions, the burden of proof regarding passing on the duty to customers, the distinction from the Proflex Systems case, and the lack of evidence supporting unjust enrichment.