2024 (8) TMI 483 - AT - Customs

Refund of 4% SAD for import of PB100 Finger Print Scanner with USB Cable - rejection of refund on the ground that the identity of the imported goods that were claimed to have been sold under the respective sales invoices have not been established beyond doubt - HELD THAT - The procedure to be adopted for refund of 4% Additional Duty of Customs has been prescribed by Boards Circular No. 6/2008-Customs, issued from F. No. 401/104/2007-Cus.III, dated 28/04/2008. The circular states that the refund applicant should produce a certificate from the statutory auditor/ Chartered Accountant who certifies the importer s annual financial accounts under the Companies Act or any statute, explaining how the burden of 4% CVD has not been passed on by the importer and to fulfill the requirement of unjust enrichment. In the absence of a challenge to the said certificate by revenue it would not be possible to discard the same and reject the refund. Hence the rejection of the refund claim merely on grounds of the mismatch of description of the goods in the Bill of Entry and invoice, without challenging the certificate, is not sustainable, so long as the CA s certificate shows that the goods mentioned in the BE and commercial invoice as per the correlation statement are one and the same thing. The Hon'ble High Court of Madras in the case of JOHNSON LIFTS PVT. LTD. VERSUS ASSTT. COMMR. OF CUS. (REFUNDS) , CHENNAI 2021 (2) TMI 401 - MADRAS HIGH COURT in a similar situation held ' Circular No. 6/2008, which clarifies the conditions prescribed in Notification No.102/2007, dated 14-9-2007, requires the importer to produce the certificate of the Statutory Auditor along with the correlation statement and if such certificate and correlation statement are produced, the respondent is bound to accept the description of the goods in the import documents as well as the Sales Invoice to be one and the same, on the strength of the certificate/correlation statement.' The appellant is entitled to the refund claims made. Consequently, the impugned order is set aside - Appeal allowed.

Summary

Issues:
1. Refund claim of 4% SAD for import of "PB100 Finger Print Scanner with USB Cable" rejected due to mismatch in goods description.
2. Violation of principles of natural justice in rejecting refund claims without show cause notice.
3. Appellant's argument of renaming product for domestic market sales strategy.
4. Requirement of Chartered Accountant's certificate for refund procedure.
5. Applicability of Circular No. 6/2008-Customs for refund process.
6. Comparison with the judgment of the Hon'ble High Court of Madras in a similar case.

Analysis:
1. The appellant filed a refund claim for 4% Special Additional Duty (SAD) for importing "PB100 Finger Print Scanner with USB Cable." The claim was rejected by the Assistant Commissioner of Customs due to a mismatch in goods description between the Bill of Entry and sales invoices. The Commissioner of Customs (Appeals) upheld the rejection, leading to the present appeal.
2. The appellant argued a violation of principles of natural justice, stating that the rejection lacked a show cause notice and an opportunity for a personal hearing. The appellant also explained their strategy of renaming the product for the domestic market, emphasizing that the goods sold matched those imported.
3. The requirement of a Chartered Accountant's certificate, as per Circular No. 6/2008-Customs, was highlighted. The certificate aimed to ensure that the burden of 4% CVD was not passed on and to prevent unjust enrichment.
4. The Tribunal noted that the rejection based solely on a mismatch in goods description without challenging the Chartered Accountant's certificate was not sustainable. The judgment cited the Madras High Court's decision in a similar case, emphasizing adherence to prescribed procedures for refund claims.
5. Following the High Court's guidance, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the refund claims with consequential relief. The judgment emphasized the importance of following judicial discipline and jurisdictional guidelines in such matters.