2022 (4) TMI 949 - AT - Customs

Rejection of SAD refund claim - rejection on the ground of mismatch of description of goods in the import document and subsequent sale invoices - HELD THAT - In the instant case Statutory Auditor namely Chartered Accountant had issued certificates in respect of all five refund claims, which are also annexed to the appeal memo at page 51, 61, 86 ,126, 169 and noted in the Order-in-Original as well as Order-in-Appeal, which were also produced along with original sale invoices. Therefore, erroneously applying CBEC Circular No. 15/2010-Cus dated 29.06.2010 concerning filing of fraudulent documents like duplicates invoices to seek refund against stock not sold out, is not at all applicable to the Appellant case. There is a clear findings of the Hon ble Madras High Court in JOHNSON LIFTS PVT. LTD. VERSUS ASSTT. COMMR. OF CUS. (REFUNDS) , CHENNAI 2021 (2) TMI 401 - MADRAS HIGH COURT concerning the admissibility of CA certificate along with original sale invoice wherein it was clearly stipulated that the respondent-department is bound to accept the description of goods in the import documents as well as sale invoice to be one and the same, on the strength of the certificate/correlation statement issued by the Statutory Auditor (Chartered Accountant). The appellant is entitled to refund alongwith applicable interest - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Mismatch of description of goods in import document and sale invoices leading to rejection of refund claim of 4% SAD.

Analysis:
The case involved a dispute over the rejection of a refund claim of 4% Special Additional Duty (SAD) due to a mismatch in the description of goods between the import document and the subsequent sale invoices. The Assistant Commissioner of Customs noted discrepancies in the description provided by the importer, stating that the goods imported were declared as specific types of waste or defective materials, while the sales invoices simply mentioned generic terms like "Tinplate" or "T.M.B.P." The authority referred to Circular No. 15/2010-Cus, highlighting fraudulent practices by traders to claim refunds improperly.

The Commissioner of Customs (Appeals) upheld the rejection, emphasizing the importance of establishing a clear nexus between the imported goods and those sold locally. The Commissioner cited Circular No. 15/2010-Cus and Notification No. 102/2007-Cus to support the decision, pointing out that inadequate or misleading descriptions on invoices could lead to refund manipulation and revenue loss for the government.

However, the appellant argued that the use of abbreviated or incomplete descriptions in sale invoices was common practice, possibly due to staff convenience or lack of detailed knowledge. The appellant presented certificates from a Chartered Accountant correlating the payment of Sales Tax/VAT on imported goods with the sale invoices, as required by Circular No. 06/2008-Cus. Additionally, the appellant referenced a judgment from the Madras High Court emphasizing the acceptance of the description of goods in import documents and sale invoices as the same when supported by a Chartered Accountant certificate.

In light of the judicial precedent set by the Madras High Court and the evidence presented, the Tribunal allowed the appeal, setting aside the denial of the refund claim. The Tribunal directed the respondent-department to refund the amount with applicable interest within three months of the order. The decision highlighted the importance of proper documentation and compliance with statutory requirements in refund claims related to imported goods.