2024 (8) TMI 1158 - AT - Customs

Refund of the Special Additional Duty of Customs (SAD) - rejection on the ground that description of the imported goods does not match - non-compliance with N/N. 102/2007-Cus dated 14.9.2007 - HELD THAT - The fact remains that the appellant has produced a Chartered Accountant s Certificate along with the reconciliation statement as required by Boards Circular. In such a case the decision to discard the certificate should be based on certain incriminating and reliable documents and the reasons for disbelieving the certificate should be clearly spelt out. In the absence of such action the claim cannot be rejected. In Chowgule Company Pvt. Ltd. v. Commissioner of Customs C. Ex., 2014 (8) TMI 214 - CESTAT MUMBAI (LB) , a Larger Bench of this Tribunal examined a reference of a related matter as to whether to avail the benefit of N/N. 102/2007, the condition 2(b) of the Notification is mandatory for compliance being a trader who cleared the goods on the strength of commercial invoices. The judgment went on to examine the genesis and object of the levy and the role of the exemption notification, which is very useful in understanding the issue. A similar view is also relevant for discrepancies noticed in the description of goods between the sales invoice and the Bill of Entry in the impugned case. Grounds such as minor mismatch in description of goods in the invoice, and clerical errors in dates do not go to the root of the validity of the refund claim and are curable. The CA s Certificate along with the reconciliation statement has been prescribed in Boards Circular to provide a ledger/ document-based scrutiny of the claim and should ordinarily be relied upon to sanction the claim - Regular cash inflows are the lifeline of a trade / business and blocking legitimate claims on half-baked reasons does a great dis-service and should be avoided. The Hon ble Madras High Court in its judgment in PP PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI SEAPORT COMMISSIONERATE-IV 2019 (5) TMI 830 - MADRAS HIGH COURT , examined whether the Tribunal, in the face of documentary evidence produced by the appellant, was correct in setting aside the order of the Appellate Authority, holding that there was no correction between the imports and subsequent sales? It held that ' the adjudicating authority has not come to a conclusion that the product sold was entirely different. In fact, there was nothing on record to disbelieve the Chartered Accountant s certificate which certified that both products are one and the same. If the adjudicating authority had to disbelieve such certification, then there should have been material to do so. However, the larger question would be whether at all such jurisdiction is vested with the adjudicating authority, when there is no allegation of any fraud or misrepresentation against the appellant.' The impugned order rejecting the refund claims is not proper. The same is hence set aside - The appeal is allowed.

Summary

Issues:
Rejection of refund claim due to mismatch in description of goods; Compliance with Notification No. 102/2007-Cus; Validity of Chartered Accountant's Certificate; Interpretation of Notification No. 102/2007-Cus; Role of Sales Invoices in refund claims.

Analysis:
The appellant filed a refund claim for imported goods with mismatched descriptions, leading to rejection by the lower authority citing non-compliance with Notification No. 102/2007-Cus. The appellant submitted various documents, including a Chartered Accountant's Certificate, to support the refund claim. The appellant argued that minor discrepancies should not invalidate the claim, referring to relevant judgments. The Authorized Representative emphasized strict adherence to notification terms.

The Tribunal found that the rejection based on description discrepancies was not valid as the appellant provided a Chartered Accountant's Certificate and reconciliation statement as per Boards Circular. Refusal to accept the certificate should be backed by reliable evidence, and reasons for disbelief must be clear. The Tribunal cited a case discussing the mandatory compliance with Notification No. 102/2007 for benefit availing.

Referring to the Madras High Court judgment, the Tribunal highlighted the importance of documents for SAD refund eligibility and the relevance of product descriptions in sales invoices. The Court emphasized that minor discrepancies should not lead to claim rejection unless the products are entirely different. The Tribunal upheld the first appellate authority's decision, emphasizing the co-relation between imported and sold goods.

Ultimately, the Tribunal set aside the impugned order rejecting the refund claims, stating it was not proper. The appeal was allowed, and consequential relief granted as per law. The Tribunal's decision was pronounced in open court on 22.08.2024. The judgments cited by the appellant supported the position taken by the Tribunal.