2014 (5) TMI 204 - AT - Customs

Refund claim of SAD - Condition of Notification - Whether to avail the benefit of Notification no. 102/07, the condition 2(b) of the Notification is mandatory for compliance being a trader who cleared the goods on the strength of commercial invoices - Held that - As there are two contrary decisions of this Tribunal i.e. Equinox Solution Ltd. Versus Commissioner of Customs (Import), Mumbai 2010 (12) TMI 74 - CESTAT, MUMBAI & Astra Zeneca Pharma India Ltd. vs. CCE, New Delhi 2013 (11) TMI 1474 - CESTAT NEW DELHI - It would be appropriate to refer the matter to the Larger Bench of this Tribunal to resolve the issue - Registry is directed to place the matter before the Hon ble President to constitute a Larger Bench to resolve the issue.

Summary

Issues Involved:
Appeal against the rejection of refund claim of SAD under Notification no. 102/2007 due to lack of endorsement on invoices regarding non-passing of SAD benefit to the buyer. Conflict between decisions regarding the mandatory compliance of condition 2(b) of the Notification for traders clearing goods on commercial invoices.

Analysis:

1. Refund Claim Rejection:
The appellants contested the rejection of their refund claim of Special Additional Duty (SAD) under Notification no. 102/2007. The impugned order was based on the absence of an endorsement confirming that no credit of additional duty was taken, and the benefit of SAD was not passed on to the buyer. The appellants, being traders, argued that since they cleared imported goods and sold them by paying CST/VAT without incorporating any duty element in the invoice, the buyer did not avail the benefit of SAD. They relied on precedents like Equinox Solution Ltd. vs. CC (Import), Mumbai and Novo Nordisk India Pvt. Ltd. vs. CC (ACC & Import), Mumbai to support their position.

2. Opposing Views:
The learned AR, however, referred to the decision in Astra Zeneca Pharma India Ltd. vs. CCE, New Delhi, emphasizing strict compliance with the notification's conditions. The AR contended that the condition in question must be adhered to without exceptions. This conflicting stance led to a crucial decision-making juncture.

3. Judicial Intervention:
After hearing both sides and acknowledging the contradictory interpretations by different tribunals, the judge, Mr. Ashok Jindal, deemed it necessary to refer the matter to a Larger Bench of the Tribunal for resolution. The pivotal issue to be addressed by the Larger Bench was whether compliance with condition 2(b) of Notification no. 102/2007 is obligatory for traders who cleared goods based on commercial invoices, thereby seeking to settle the discordance in legal interpretations.

4. Resolution Process:
In light of the divergent opinions and the significance of the matter, the Registry received instructions to present the case before the Hon'ble President for the constitution of a Larger Bench. This procedural step aimed at obtaining a conclusive determination on the mandatory nature of the notification's conditions for traders conducting business through commercial invoices, thereby ensuring uniformity and clarity in the application of the relevant legal provisions.

This detailed analysis encapsulates the core issues, arguments, conflicting perspectives, and the judicial decision to seek resolution through a Larger Bench, underscoring the complexity and legal intricacies involved in the appellate tribunal's deliberations.