2023 (3) TMI 453 - AT - Customs

Refund of SAD - rejection on the ground that the sales invoices were not endorsed with the mandatory declaration that no cenvat credit can be availed on the invoices . Whether refund can be granted as per the benefit of Notification No.102/2007-Cus. Dated 14.09.2007, if condition 2(b) of the notification has not been complied by a trader who cleared the goods on the strength of commercial invoices? HELD THAT - The said issue has been decided by the Larger Bench in the case of CHOWGULE COMPANY PVT LTD VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE 2014 (8) TMI 214 - CESTAT MUMBAI (LB) wherein it was held that A trader-importer, who paid SAD on the imported goods and who discharged VAT/ST liability on subsequent sale, and who issued commercial invoices without indicating any details of the duty paid, would be entitled to the benefit of exemption under Notification No.102/2007-Cus., notwithstanding the fact that he made no endorsement that credit of duty is not admissible on the commercial invoices, subject to the satisfaction of the other conditions stipulated therein. The Tribunal in a similar matter in the case of IM/S. INFINITY INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , CHENNAI-IV 2019 (12) TMI 655 - CESTAT CHENNAI wherein the authorities below had rejected the refund claim on the ground that the commercial invoices did not contain the declaration that no credit is admissible on the duty paid and also refused to accept the C.A certificate, considered the issue and observed that On perusal of description of the goods mentioned above, it is found that character of the goods (paper) has been shown in the sales invoices. So also, the goods sold are paper of different grades. The appellant has pointed out that he has used description of the goods as known in the trade in India. Department does not have a case that the description shown in the invoices are not the goods known in the local market in India. Thus, there are no major discrepancy in the description of the goods in the Bill of Entry and the sale invoices. The rejection of refund is without legal basis. The impugned order rejecting the refund is set aside - Appeal allowed.

Summary

Issues:
1. Whether refund can be granted under Notification No.102/2007-Cus. if condition 2(b) is not complied with by a trader clearing goods on commercial invoices.

Analysis:
The case involved the appellant filing refund claims for SAD amount, which were rejected due to missing mandatory declarations on sales invoices. The Commissioner (Appeals) upheld the rejection, questioning the reliance on a Chartered Accountant certificate. The main issue was whether a trader could receive a refund under Notification No.102/2007-Cus. without complying with condition 2(b) regarding invoice endorsements. The Larger Bench decision in the Chowgule & Company case clarified that a trader-importer could still claim the exemption despite missing endorsements, subject to other conditions. This decision was followed in the Infinity Industries Pvt. Ltd. case, emphasizing the importance of the statutory auditor's certificate in establishing the correlation between VAT and SAD paid. The Tribunal, considering these precedents, found the rejection of the refund unjustified and allowed the appeal, providing consequential relief as per law.

This judgment highlights the significance of fulfilling conditions for claiming exemptions under customs notifications. It underscores the importance of statutory auditor certificates in demonstrating compliance with legal requirements. The decision sets a precedent for traders seeking refunds on SAD amounts, clarifying that missing endorsements on invoices may not necessarily disqualify them from benefiting under relevant notifications. The Tribunal's thorough analysis of the legal provisions and precedents ensures a fair and just outcome in line with established principles of law and taxation.

In conclusion, the judgment provides clarity on the interpretation and application of Notification No.102/2007-Cus. in cases involving refund claims for SAD amounts. It establishes the relevance of statutory auditor certificates in proving compliance with conditions, emphasizing the need for a holistic assessment of the facts and legal precedents to determine entitlement to refunds. The decision serves as a guide for future cases involving similar issues, ensuring consistency and adherence to statutory requirements in customs matters.