2024 (10) TMI 407 - AT - Customs

Refund of SAD - discrepancy in description of the goods imported and the tax invoice and the endorsement as per condition in para 2(b) of N/N. 102/2007-Cus dated 14.9.2007 - refund rejected on the ground that along with the Chartered Accountant s statement, the appellant submitted copies of invoices issued by them for movement of the said imported goods to the respective buyers against the said invoices but the Chartered Accountant did not certify such sales invoices in the correlation sheet. HELD THAT - It is not disputed that the appellant had submitted sales invoices and VAT / CST paid challans / VAT / CST returns as proof that the goods imported were sold and that necessary VAT / CST were paid on such sale along with Chartered Accountant s certificate and correlation sheet. The rate of duty CST was paid is not relevant so long as it has been paid correctly at the effective rate. In this context the CA not certifying the invoices issued by the appellant for movement of the said imported goods to the respective buyers was a curable defect. With the Original Authority expressing his satisfaction with the description of the goods being made the claim could very well have been verified and the rejection of refund on this ground was not warranted. As regards the endorsement in the invoice not being worded properly the matter was examined by the Larger Bench of the Tribunal in CHOWGULE COMPANY PVT LTD VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE 2014 (8) TMI 214 - CESTAT MUMBAI (LB) and it was held that in respect of a commercial invoice, which shows no details of the duty paid, the question of taking of any credit would not arise at all. Therefore, non-mention of the duty in the invoice issued itself is an affirmation that no credit would be available. This being so, the condition prescribed under clause (b) of para 2 of the N/N. 102/2007 stood satisfied. Further 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 - Appeal allowed.

Summary

Issues:
- Refund claim rejection based on discrepancy in description of goods and tax invoice
- Non-endorsement of invoice as per Notification 102/2007-Cus
- Applicability of VAT/CST payment for exemption from SAD
- Certification of sales invoices by Chartered Accountant
- Proper wording of endorsement in sales invoice

Analysis:
The appeal was filed against the Order in Appeal C. Cus. I No. 87/2014 passed by the Commissioner of Customs (Appeals - I), Chennai, rejecting a refund claim of Rs.5,03,829 for 4% SAD levied on 'Photofinishing equipments' imported by the appellant. The lower authority rejected the claim citing a discrepancy in the description of goods and tax invoice, and non-endorsement of invoice as per Notification 102/2007-Cus. The appellant submitted sales invoices, VAT/CST paid challans/returns, and a Chartered Accountant's certificate. The Counsel argued that the endorsement requirement is procedural and cited relevant case laws. The appellant transferred goods to Bengaluru and paid appropriate CST, contending that there is no restriction on goods sold through branch transfer under the notification. The Counsel referenced various circulars and notices supporting the refund claim. However, some documents were not enclosed for examination. The Authorized Representative reiterated the points in the Order in Original and impugned order, seeking rejection of the appeal.

The Tribunal noted that the refund claim was rejected due to the Chartered Accountant not certifying sales invoices in the correlation sheet, and the endorsement on sales invoices not meeting the requirements of Notification 102/2007-Cus. The appellant had submitted proof of VAT/CST payment on sales, but the CA's failure to certify the invoices was deemed a curable defect. The Tribunal held that as long as duty was paid correctly, the rate of CST was not relevant. The endorsement issue was addressed by a Larger Bench decision, clarifying that no credit would be available if duty details were not mentioned in the invoice. The Tribunal found no fraud or misrepresentation by the appellant and set aside the impugned order, allowing the appeal with consequential relief.

In conclusion, the Tribunal found the rejection of the refund claim improper and set aside the impugned order. The appeal was allowed with consequential relief, in accordance with the law.