2024 (10) TMI 733 - AT - Customs

Refund of SAD - failure to satisfy conditions at Para 2(d)(e)(II)(III) of N/N. 102/2007-Cus. dated 14.09.2007 - whether the appellant is eligible for the refund when the conditions of the Notification are not satisfied? - HELD THAT - From the Notification read with Circular No. 16/2008 dated 13.08.2008, it is clear that the importer should pay appropriate Sales Tax or value added tax, as the case may and documents evidencing payment of the said additional duty to be produced before the authorities concerned. The Circular in the case of sale by the consignment agents stipulates that there should be an agreement between the importer and the consignment agents to sell the goods in terms of the agreements and each of the sale invoices issued by the consignment agent should indicate that the sales made by him on behalf of the importer in the capacity of consignment agent. The Commissioner (Appeals) has rightly rejected the refund claims in the absence of necessary proof to show that the imported goods were cleared by the consignment agent and VAT was paid by them on behalf of the importer. Moreover, though they produced the Chartered Accountant certificate in one of the appeals and there is no such certificate on record for the second appeal. In the present cases, no such evidences are produced and having placed only a notarised copy of the Agreement copy, which is not relevant to the period of dispute and also without any other documentary evidences to prove that VAT was paid by them for being eligible for the benefit of the Notification, the refund claims are rightly rejected. In the case of Union of India Versus VKC Footsteps India Pvt. Ltd. 2021 (9) TMI 626 - SUPREME COURT , the Hon ble Supreme Court of India observed ' when the first proviso to Section 54(3) has provided for a restriction on the entitlement to refund it would be impermissible for the Court to redraw the boundaries or to expand the provision for refund beyond what the legislature has provided. If the legislature has intended that the equivalence between goods and services should be progressively realized and that for the purpose of determining whether refund should be provided, a restriction of the kind which has been imposed in clause (ii) of the proviso should be enacted, it lies within the realm of policy.' Since the conditions of the Notification No. 102/2007-Cus. dated 14.09.2007 read with the Circular No. 16/2008 dated 13.08.2008 are not satisfied, the appellant is not eligible for the refund of special CVD amount. Therefore, the impugned orders are upheld - Appeal dismissed.

Summary

Issues Involved:
1. Eligibility for refund under Notification No. 102/2007-Cus.
2. Compliance with conditions of Circular No. 16/2008.
3. Adequacy of documentary evidence for refund claims.
4. Relevance of agreements and certificates submitted by the appellant.

Issue-wise Detailed Analysis:

1. Eligibility for refund under Notification No. 102/2007-Cus.:
The core issue was whether the appellant was eligible for a refund of the 4% additional duty under Notification No. 102/2007-Cus. dated 14.09.2007. The Notification provides an exemption for goods imported for subsequent sale, contingent upon fulfilling specific conditions. The appellant's refund claims were rejected by the Commissioner (Appeals) on the grounds that these conditions were not satisfied. The Tribunal examined whether the appellant met the necessary conditions, specifically the requirement to provide evidence of payment of additional duty and appropriate VAT on the sale of imported goods.

2. Compliance with conditions of Circular No. 16/2008:
The Circular No. 16/2008 dated 13.10.2008 outlines additional procedural requirements for sales through consignment agents or stockists. It mandates an agreement between the importer and the consignment agent, and that the sales invoices should indicate that the sale is made on behalf of the importer. The Tribunal found that the appellant failed to provide evidence of such an agreement or endorsements on invoices, as required by the Circular, thereby justifying the rejection of the refund claims.

3. Adequacy of documentary evidence for refund claims:
The appellant argued that the procedural requirements could be condoned based on substantive evidence, such as a statutory auditor's certificate and a statement detailing the payment of VAT. However, the Tribunal noted the absence of critical documents, such as endorsed invoices and relevant agreements for the period in question. The Tribunal emphasized the necessity of these documents to substantiate the refund claims, and their absence was a significant factor in upholding the rejection.

4. Relevance of agreements and certificates submitted by the appellant:
The appellant submitted an Agency Agreement and a Chartered Accountant certificate as evidence. However, the Tribunal observed that the Agency Agreement was dated after the period of imports, rendering it irrelevant for the claims. Additionally, there was no Chartered Accountant certificate for one of the appeals. The Tribunal distinguished the appellant's case from a precedent where sufficient evidence was provided, underscoring the lack of adequate documentation in the current case.

Conclusion:
The Tribunal concluded that the appellant did not satisfy the conditions of Notification No. 102/2007-Cus. and Circular No. 16/2008, primarily due to the lack of necessary documentary evidence. Consequently, the appellant was deemed ineligible for the refund of the special CVD amount, and the appeals were dismissed. The Tribunal's decision emphasized the importance of adhering to procedural requirements and providing comprehensive evidence to support refund claims.