2014 (6) TMI 782 - AT - Customs

Waiver of pre deposit - Refund of SAD / Additional Customs Duty (ADC) - notification No.102/07-Cus. dated 14.09.2007 - violation of the conditions 2 (b) of the Notification - Duty demand - Held that - words ADC not passed on are clearly mentioned in the sale invoices. Clause (b) of para 2 of the Notification provides that the importer while issuing the invoice for sale of goods, should specifically indicate in the invoice that in respect of the goods covered therein, no credit of additional duty of Customs levied thereunder Section 3 (5) of the Customs tariff Act, 1975 shall be admissible. In the present case, the applicant mentioned in the sale invoice ADC not passed on . Prima facie, it appears that ADC (Additional Customs Duty) was not passed on to the customers. We find that on an identical issue, the Tribunal in various cases allowed the appeal of the assessee. Hence, pre-deposit of duty along with interest is waived till disposal of the appeal - Stay granted.

Summary

Issues:
- Application for waiver of pre-deposit of duty
- Interpretation of conditions under Notification No.102/07-Cus.
- Compliance with conditions for refund of duty
- Judicial precedents on strict compliance with exemption notification conditions

Analysis:
The judgment pertains to an application for waiver of pre-deposit of duty amounting to Rs.3,19,662/- along with interest. The applicants had imported spares of frequency converters and claimed a refund of duty under Notification No.102/07-Cus. dated 14.09.2007. However, a proceeding was initiated to recover the refunded amount as it was deemed erroneously sanctioned. The adjudicating authority found the applicants in violation of condition 2(b) of the Notification, leading to the confirmation of the demand along with interest by the Commissioner (Appeals).

During the proceedings, the learned Counsel for the applicant presented invoices indicating "ADC not passed on" as evidence of compliance with condition 2(b) of the notification. The Counsel referenced Tribunal decisions in similar cases to support their argument. Conversely, the Authorised Representative for the Revenue highlighted the specific wording of the notification, emphasizing the need for strict adherence to conditions for availing exemption benefits. The Representative cited Supreme Court judgments, including State of Jharkhand Vs Ambay Cements and Commissioner of Central Excise, Calcutta Vs Emkay Investments (P) Ltd., to underscore the importance of adhering to conditions.

Upon evaluating the submissions, the Tribunal found that the invoices clearly stated "ADC not passed on," indicating non-credit of Additional Customs Duty to customers. This observation aligned with the requirement under clause (b) of para 2 of the Notification, which mandates explicit mention in the invoice regarding the inadmissibility of additional duty credit. The Tribunal noted that similar issues had been ruled in favor of the assessee in previous cases. Consequently, the Tribunal waived the pre-deposit of duty and interest until the appeal's disposal, granting the stay application.

In conclusion, the judgment underscores the significance of strict compliance with conditions outlined in exemption notifications for availing duty refunds, emphasizing the need for clear and unambiguous documentation to support claims.