2019 (5) TMI 923 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus dated 14.09.2007 - rejection on the ground that Para 1 of the Notification is not complied as the goods i.e Barge M V Aquarius was not imported for subsequent sale but was manufacture in Customs Bond by M/s Vijai Marine Services - rejection also on the ground that credit availed - rejection also on the ground that Condition (c) of the Notification is not satisfied as the refund claim has been filed by person other than the importer. HELD THAT - Admittedly in the present case, the invoice dated 15.03.2011 issued by the M/s Vijai Marine Services do not carry the endorsement as specified by condition 2(b) of the said Notification. The purpose of such endorsement on the invoice, is only to prevent the buyer of goods from claiming the CENVAT Credit of the Special Additional Duty (SAD) of Customs levied under Section 3(5) of Customs Tariff Act, 1975, for which this refund application has been filed. This requirement becomes more relevant if the person claiming the refund as per this notification is importer and the claimant of the CENVAT Credit is the person to whom the goods have been sold - In present case the buyer of goods himself is claiming the refund of SAD paid by the person ex-bonding the goods on payment of applicable Customs duty. In his order Commissioner (Appeal) has satisfied himself that no CENVAT Credit has been claimed in respect of the SAD paid - from the order of Commissioner (Appeal) it is evident that he has not absolutely allowed the refund application made but has allowed it subject to the condition of verification of fact of non availment of the CENVAT Credit from the jurisdictional Central Excise Officers. In our view by building this safeguard Commissioner (Appeal) has ensured substantial compliance with the condition specified at 2(b) of the Notification No 102/2007-Cus. Second objection raised by the revenue in their appeal, is with regards to the respondent filing the refund claim, they being not importer - HELD THAT - In the present case it is not disputed that the burden of the Custom duties as applicable and paid and that of the sales tax/ VAT as applicable and paid has been borne by the Applicant (Respondents). Since they have borne the burden of both the Customs Duty and Sales Tax/ VAT they have filed this refund claim. There are no infirmity in the orders of Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues Involved:

1. Compliance with Notification No 102/2007-Cus dated 14.09.2007.
2. Endorsement on invoice as per condition 2(b) of the Notification.
3. Eligibility of the refund claimant as per condition 2(c) of the Notification.

Issue-wise Detailed Analysis:

1. Compliance with Notification No 102/2007-Cus dated 14.09.2007:

The primary issue revolves around the compliance with the conditions set out in Notification No 102/2007-Cus dated 14.09.2007, which exempts goods imported for subsequent sale from the additional duty of customs. The notification specifies that the exemption is applicable if certain conditions are fulfilled, including the payment of all duties by the importer, specific endorsements on the invoice, and the filing of a refund claim by the importer.

2. Endorsement on invoice as per condition 2(b) of the Notification:

The revenue argued that the invoice issued by M/s Vijai Marine Services did not carry the mandatory endorsement that "no credit of additional duty of Customs levied under Sub Section (5) of Section 3 of the Customs Tariff Act, 1975 shall be admissible." This endorsement is crucial to prevent the buyer from claiming CENVAT Credit of the Special Additional Duty (SAD). The Commissioner (Appeal) noted that the buyer, who is also the claimant, did not claim CENVAT Credit and provided a Chartered Accountant's certificate to this effect. The Commissioner (Appeal) allowed the refund subject to verification by the jurisdictional Central Excise Officers, ensuring substantial compliance with condition 2(b).

3. Eligibility of the refund claimant as per condition 2(c) of the Notification:

The revenue contended that the refund claim was invalid as it was filed by a party other than the importer, violating condition 2(c) of the Notification. However, the Commissioner (Appeal) interpreted the term "importer" in the context of the notification and Section 27 of the Customs Act, 1962, which allows a person who has borne the duty to claim a refund. The Commissioner (Appeal) observed that the respondents, having borne the burden of both the Customs Duty and Sales Tax/VAT, were eligible to file the refund claim. This interpretation aligns with the legal precedent set by the Hon'ble Apex Court in the case of Mafatlal Industries, which supports the right of a person who has borne the duty to claim a refund.

Conclusion:

The appellate tribunal upheld the order of the Commissioner (Appeal), dismissing the revenue's appeal and confirming that the conditions of Notification No 102/2007-Cus were substantially complied with. The tribunal emphasized that the claimant, having borne the duty, was entitled to the refund, and the procedural deficiencies noted did not disentitle the claimant from receiving the refund. The appeal filed by the revenue was dismissed, and the cross objections were disposed of accordingly.