2020 (4) TMI 805 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus. - Refund denied on the ground of non-stamping of the invoices - denial on the ground that the invoices showing sale of the goods do not bear no credit of additional duty of Customs leviable under sub-section 5 of Section 3 of Customs Act shall be admissible - HELD THAT - Non-declaration in the invoices as per para 2(b) of the notification indicating that no credit of additional duty is admissible to the customer is only a procedure required to be adopted. The purpose of the said declaration is that the buyer does not have undue Cenvat credit in case SAD has not been shown separately in the invoices. Refund also denied on the ground that CA certificate is not supported by any documentary evidence to show that the duty incidence has not been passed on to the customers - HELD THAT - The impugned order stands passed beyond the scope of the show cause notice. Once there is no proposal in the notice to deny refund claim on a particular ground which also does not stand considered by the original adjudicating authority, the consideration of the same by Commissioner (Appeals) amounts to travelling beyond the show cause notice. Inasmuch as the appellant has produced the Chartered Accountant s certificate, the same has to be allowed on this ground alone. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Refund of Special Additional Duty (SAD) under Notification No. 102/2007-Cus. dated 14 September, 2007; Denial of refund claims based on invoice requirements and unjust enrichment grounds.

Analysis:

Issue 1 - Refund of SAD under Notification No. 102/2007-Cus.:
The issue in the present appeal pertains to the refund of Special Additional Duty (SAD) in accordance with Notification No. 102/2007-Cus. dated 14 September, 2007. The notification allows for the refund of SAD paid during the import of goods, subject to specific conditions outlined within the notification.

Issue 2 - Denial of refund claims based on invoice requirements:
The appellant's refund claims were denied on two grounds. Firstly, it was contended that the invoices did not bear the specific declaration regarding the inadmissibility of credit for additional duty of Customs, as required by the notification. The appellant argued that the absence of such declaration on their invoices should not result in the denial of the refund, citing precedents where procedural lapses did not lead to the denial of benefits. The Tribunal's decisions in cases like R.K.G. International Pvt. Ltd. and Novo Nordisk India Pvt. Ltd. were relied upon to support this argument.

Issue 3 - Denial of refund claims based on unjust enrichment grounds:
The second ground for the denial of the refund was related to unjust enrichment. The Commissioner (Appeals) referred to a Chartered Accountant's certificate provided by the appellant, which was deemed insufficient as it lacked supporting documentary evidence to demonstrate that the duty incidence had not been passed on to customers. The appellant highlighted Circular No. 18/2010 and Tribunal decisions, emphasizing that a Chartered Accountant's certificate without supporting documents cannot be considered as adequate evidence for denying Cenvat credit based on unjust enrichment. It was also noted that the ground of unjust enrichment was not specifically raised in the show cause notice or the original order.

Judgment:
The Tribunal held in favor of the assessee on both grounds. Regarding the invoice requirements, it was determined that the non-declaration in the invoices regarding the inadmissibility of credit for additional duty was a procedural requirement, and the refund of SAD was allowed based on precedents. On the issue of unjust enrichment, the Tribunal found that the consideration of this ground by the Commissioner (Appeals) went beyond the scope of the show cause notice, and since the appellant had provided a Chartered Accountant's certificate, the refund claim had to be allowed on this ground alone. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.