2021 (11) TMI 28 - AT - Customs

Refund of SAD - time limitation - Sale invoices submitted on support of the refund claim were self certified or not - quantum of VAT/CST on sale invoices - VAT returns for the relevant period were submitted or not - HELD THAT - The impugned claim have been filed under Notification No.102/ 2007 Cus. dated 14.09.2007 which exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 when imported into India for subsequent sale from the whole of the Additional Duty of Customs leviable thereof under Sub-section 3 of said Customs Tariff Act (CTA). Section 3 (5) of CTA indicates that SAD is the duty in the nature of sales /VAT. The intent of legislature about such duties seeking to countervailance / Sales/ VAT etc. leviable on like goods sold in India is to counterbalance the duties borne by like goods produced indigenously in India. The exemption provided in the Notification issued in exercise of the power under section 25 (1) of the Customs Act is conditional upon subsequent sale, as can been seen from the conditions required to be fulfilled in order for an importer to avail the benefit of this exemption. The limitation fixed by amending the Notification No.102 in Notification No.93/2008 (as impressed upon by ld. D.R.) is absolutely meaningless - It is also apparent that the appellant had opted to not to give any satisfactory reply to do away those deficiencies neither at the stage of issuance of deficiency memos nor at the subsequent stage of Show Cause Notice being served upon the appellants. Appellants rather to not to appear before the Investigating Officers despite opportunities being given to them. They also failed to appear before the Adjudicating Authorities below. Though the issue of limitation is not applicable to the present refund claims and the refund claim of SAD cannot be held to be barred by limitation calculating the period of one year from the date of payment of said SAD - owing to the other two discrepancies, the refund claim has been held to have been rightly rejected - Appeal disposed off.

Summary

Issues involved:
1. Refund claim rejection on the ground of limitation.
2. Interpretation of Notification No.102/2007-Cus dated 14.09.2007.
3. Compliance with conditions for availing exemption under the Notification.
4. Impact of subsequent amendments on refund claims.
5. Failure to address discrepancies in refund claim submission.

Issue 1: Refund claim rejection on the ground of limitation:
The appellant imported polyster non-textured lining fabric and paid the applicable 4% Special Additional Duty of Customs (SAD). The refund claim was filed under Notification No.102/2007-Cus. The Department issued deficiency memos highlighting discrepancies, including time-barred claims and missing VAT returns. The Show Cause Notice proposed rejection, leading to subsequent Orders-in-Original and Orders-in-Appeal rejecting the claims. The appellant argued against rejection based on limitation, citing a Delhi High Court decision. The Department contended that the appeal was dismissed on limitation grounds, and Notification No.93/2008-Cus. prescribed a one-year period for refund claims. The Tribunal held that while the limitation aspect did not apply, other discrepancies justified the rejection, upholding the decision.

Issue 2: Interpretation of Notification No.102/2007-Cus dated 14.09.2007:
The Tribunal analyzed the conditions under Notification No.102/2007, emphasizing that the exemption from Additional Duty of Customs is contingent upon subsequent sale of the imported goods. The importer must fulfill specific requirements, including payment of all duties upon import, indicating no credit of additional duty in the sale invoice, filing a refund claim, and paying appropriate sales tax upon sale. The benefit of the exemption can only be availed after the completion of the sale of imported goods for which SAD was paid.

Issue 3: Compliance with conditions for availing exemption under the Notification:
The Tribunal clarified that the benefit of the Notification can only be availed post the sale of imported goods. Therefore, the question of refunding SAD does not arise until the sale is completed. The Tribunal highlighted the necessity of fulfilling all conditions outlined in the Notification for claiming the refund, emphasizing the importance of completing the sale process before applying for a refund.

Issue 4: Impact of subsequent amendments on refund claims:
The Tribunal addressed the impact of subsequent amendments, particularly Notification No.93/2008-Cus., which specified a one-year period for filing refund claims. The Tribunal held that the amendment did not render the limitation aspect applicable to the present refund claims. The Tribunal relied on a Delhi High Court decision to support this interpretation, emphasizing that the refund claims were rightly rejected due to other discrepancies, despite the absence of a limitation issue.

Issue 5: Failure to address discrepancies in refund claim submission:
The Tribunal noted that apart from the limitation issue, there were three other discrepancies in the refund claims, as pointed out by the Department. The appellant failed to provide satisfactory replies to address these deficiencies at various stages, including deficiency memos and the Show Cause Notice. The appellant's non-cooperation and failure to rectify the discrepancies led to the rejection of the refund claims, which was upheld by the Tribunal.

The Tribunal's detailed analysis covered the rejection of the refund claim based on limitation, the interpretation of relevant notifications, compliance requirements for availing exemptions, the impact of subsequent amendments, and the significance of addressing discrepancies in refund claim submissions. The decision highlighted the importance of meeting all conditions for claiming refunds under the applicable notifications and emphasized the necessity of completing the sale process before seeking a refund of Special Additional Duty of Customs.