2024 (6) TMI 782 - AT - Customs

Refund of special additional duty (SAD) - sole ground for rejection was that the description in the sale invoices did not match the descriptions of the imported goods in the bill of entry which comprised several lots of varying dimensions - HELD THAT - The appellant had brought on record that the software deployed by them for generating invoices precluded the entirety of the description from appearing on the sales invoices and, at the same time, had also submitted the RG23D register in which removals had been recorded which would, at least, provide details lacking in the description of the goods corresponding to the respective invoices. If at all, there were any doubts about the genuineness of the invoices, that could have been verified and claimant put to notice of intention to deny refund for that reason. The claimant could have been asked to demonstrate through the documents furnished that the invoices pertain to the imported goods. No such evidence is forthcoming and no such effort was undertaken. Consequently, it is found that the denial of refund is improper. In the scheme of exemption, it would be appropriate for the original authority to re-visit the claim for refund to ascertain the correspondence of the invoices with the RG23D furnished at the time of adjudication and to deny refund only to the extent that evidence of the goods having been consumed by the importer is available or it is established that the imported goods had not been sold in the market within one year from the date of import. The impugned order is set aside - matter remanded back to the original authority for a fresh decision on the basis of submissions by the appellant herein - appeal disposed off by way of remand.

Summary

Issues involved:
The rejection of claim for refund of special additional duty (SAD) u/s 3(5) of Customs Tariff Act, 1975 on import of 'prime alloy steel hot rolled coils' under notification no. 102/2007-Customs dated 14th September 2007 due to non-compliance with conditions in the notification.

Summary of Judgment:

Issue 1: Rejection of refund claim due to mismatch in descriptions on sale invoices and bill of entry:

The appeal challenged the rejection of the claim for refund of special additional duty (SAD) levied on import of steel coils. The original authority rejected the claim citing discrepancies in the descriptions on sale invoices compared to the bill of entry. The appellant explained that the software used had limitations in displaying complete descriptions, which was supported by certification from the software supplier. However, the authority emphasized the importance of matching descriptions for correlation between imported and sold goods, despite the assessment being based on size, which was not relevant for SAD. The first appellate authority upheld the rejection, expressing concerns about possible manipulation and lack of uniformity in sale invoices. The Tribunal found the denial of refund improper, directing a re-visit of the claim based on the correspondence between invoices and supporting documents.

Issue 2: Interpretation of conditions for refund under the exemption notification:

The Tribunal emphasized the sole criterion for refund entitlement as sale and payment of tax on sale, with conditions in the exemption notification aimed at ensuring integrity. The strict interpretation of the notification, as seen in the lower authorities' decisions, was deemed to be excessive, especially in relying on circulars beyond notification stipulations. The Tribunal clarified that correlation between duty paid and goods sold was the key, and any insinuation of additional conditions beyond the notification was unwarranted. The denial of refund was deemed improper, and the matter was remanded for a fresh decision based on the appellant's submissions.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the original authority for a fresh decision on the refund claim, emphasizing the need to verify the correspondence between invoices and supporting documents. The denial of refund was considered improper, and the Tribunal directed a re-evaluation based on the evidence provided by the appellant.

(Order pronounced in the open court on 13 / 06 / 2024)