2020 (2) TMI 874 - AT - Customs

Refund of SAD - Focus Product Scheme - denial of refund on the ground that SAD has not been paid in cash but through scrips and as such the amount cannot be refunded - HELD THAT - Strong reliance has been placed on the Hon'ble Bombay High Court judgement in Allen Diesels India Pvt. Ltd. v. Union of India 2016 (2) TMI 247 - DELHI HIGH COURT where the Hon'ble High Court had held that for refund of SAD it is not necessary that the same should have been paid in cash and it is sufficient if the payment is through using various scrips. Commissioner (Appeals) is finding fault with the judgment of the Hon'ble Delhi High Court in Allen Diesels India Pvt. Ltd. v. Union of India 2016 (2) TMI 247 - DELHI HIGH COURT that since the said circular was not brought to the notice, the Judgement is not correct. The said action on the part of the Commissioner (Appeals) amounts to contempt of the Hon'ble High Court inasmuch as non-following of a judgment of the superior courts by finding faults in the same, is admittedly not in accordance with the legal adjudication proceedings. Commissioner (Appeals) being a senior officer of the Revenue should have been aware of the legal precedent of following the higher courts decision irrespective of his personal views of the judgment being correct or otherwise. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund of Special Additional Duty (SAD) paid through scrips.
2. Interpretation of notification 102/2007-Cus.
3. Applicability of judgments in similar cases.
4. Compliance with High Court judgments in refund cases.

Analysis:
1. The appellant imported hot rolled wire rods and paid 4% SAD using Focus Product Scheme scrips. The appellant applied for a refund of ?7,91,408 under notification 102/2007-Cus, which allows a refund if the imported products are sold later on payment of VAT without availing CENVAT credit. The Revenue denied the refund, arguing that SAD was paid through scrips, not cash. The appellant challenged this denial, citing the Allen Diesels case where the High Court allowed refunds paid through various scrips.

2. The Commissioner (Appeals) considered the Allen Diesels case and noted that the High Court had quashed certain circulars but did not address the effect of a DGFT public notice. The Commissioner's decision deviated from the High Court's ruling, questioning the judgment's correctness due to the circular not being brought to the High Court's attention. This deviation was criticized as contemptuous of the High Court's authority, emphasizing the importance of following superior court decisions.

3. The appellate authority set aside the impugned order, allowing the appeal and granting consequential relief to the appellant. The judgment underscores the obligation to adhere to higher court decisions regardless of personal opinions on their correctness, ensuring consistency and respect for legal precedents in adjudication proceedings.

This judgment clarifies the eligibility for SAD refunds paid through scrips under specific notifications, emphasizing the need to follow established legal precedents and uphold the authority of higher courts in interpreting and applying relevant laws.