2024 (8) TMI 1493 - AT - Customs

Refund claim for 4% Additional Duty of Customs leviable u/s 3(5) of Customs Tariff Act 1975 - lower authority has rejected the claim for non-fulfilment of condition 2(b) and 2(e) of the Notification No. 102/2007-Cus dated 14.9.2007 on the ground that the sales invoices do not bear the mandatory indication no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act 1975 shall be admissible as required under condition No. 2(b) of Notification No. 102/2007-Cus. dated 14.9.2007. HELD THAT - The appellant is a trader importer issuing commercial invoices while trading in imported computer and electronic items. For availing CENVAT credit an invoice would have to indicate the quantum of duty paid separately for each type of duties in terms of the CENVAT Credit Rules. Where a commercial invoice shows no details of the duty paid no credit can be availed by the receiver of the goods. Moreover the Chartered Accountant Certificates shows that the Appellant has not passed on the burden of SAD paid by them to their customers. The said Certificate has not been challenged or found fault with by revenue. Hence the conditions of the notification are ratified. In the circumstances the refund could not have been rejected by the lower authority. Judicial discipline requires that a Bench of lesser quorum should not doubt the correctness of a view taken by a Bench of larger quorum. Hence apart from my findings above also humbly defer to the views of the Larger Bench. We set aside the impugned order and allow the appeal. Appellant is eligible for consequential relief if any as per law. The appeal is disposed of accordingly.

Summary

Issues:
1. Refund claim for 4% Additional Duty of Customs under sec. 3(5) of Customs Tariff Act, 1975.
2. Rejection of refund claim for non-fulfillment of conditions of Notification No. 102/2007-Cus.
3. Interpretation of endorsement requirement on commercial invoices for availing CENVAT credit.
4. Application of the decision in Chowgule & Company Pvt. Ltd. case.
5. Consideration of Chartered Accountant's Certificate in determining passing on the burden of SAD to customers.

Detailed Analysis:
Issue 1:
The appellant filed a refund claim for 4% Additional Duty of Customs under sec. 3(5) of Customs Tariff Act, 1975. The claim was rejected by the lower authority due to non-fulfillment of conditions of Notification No. 102/2007-Cus, specifically condition 2(b) and 2(e), which required a specific endorsement on sales invoices. The appellant appealed against this decision.

Issue 2:
The main contention was regarding the endorsement requirement on invoices as per the Notification. The appellant argued that their invoices contained a declaration indicating non-registration under Central Excise, non-availment of Cenvat Credit, and SAD not passed on to the Customer. The appellant relied on the decision in Chowgule & Company Pvt. Ltd. case, where it was held that non-declaration on the invoice itself affirmed the non-availability of CENVAT Credit, and the endorsement requirement was procedural.

Issue 3:
The Tribunal analyzed the requirement of endorsement on commercial invoices for availing CENVAT credit. It was noted that for credit to be availed, invoices must indicate the duty paid separately. However, the Tribunal considered the Chartered Accountant's Certificate, which confirmed that the burden of SAD had not been passed on to customers, supporting the appellant's claim for refund despite the lack of specific duty details on the invoices.

Issue 4:
The Tribunal referred to the decision in Chowgule & Company Pvt. Ltd. case, where it was clarified that a trader-importer could still benefit from the exemption under Notification No. 102/2007-Cus even without the specific endorsement on invoices, as long as other conditions were met. The Tribunal upheld this interpretation and emphasized the importance of fulfilling exemption notification conditions.

Issue 5:
The Tribunal, while acknowledging the findings in the present case, also deferred to the views of the Larger Bench in Chowgule & Company Pvt. Ltd. case. The Tribunal set aside the impugned order, allowing the appeal and granting the appellant eligibility for consequential relief as per the law. The judgment was pronounced on 08.08.2024.