2015 (10) TMI 1912 - HC - Customs

Refund of claim Additional duty of Customs / SAD Appellant contends that defects of application intimated to assesee almost after 2 years and adequate time not granted to appear and produce the documents Certificate of Statutory Auditor correlating payment of ST/ VAT on imported goods with invoices of sale was not enclosed - Held That - Defects of application should have been intimated within 10 days Reasonable time must have been given to appear and produce documents; Respondent cannot claim to have fulfilled the requirements of the Notification, the Regulations and the Circular matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Dismissal of writ petition directing appellant to avail alternative remedy of appeal against order rejecting refund claim.

Analysis:
The appellant filed a refund claim for 4% additional duty of customs levied under the Customs Tariff Act, 1975, for importing reprocessed LLDPE granules. The refund was claimed under specific notifications and circulars. Despite regulations obliging timely processing of refund applications, the respondent delayed pointing out a single defect in the application after almost two years. The defect required a certificate from the statutory auditor correlating payment of ST/VAT with the invoice of sale. The respondent's notice demanding compliance was received late by the appellant, leading to non-compliance and rejection of the refund claim.

The appellant challenged the rejection through a writ petition, which was dismissed by the learned Judge citing the availability of an alternative remedy of appeal. However, the High Court observed that this was not a case where bypassing the alternative remedy would benefit the appellant. The rejection of the refund claim was based on a single deficiency related to the certificate from the statutory auditor, which was not a substantial ground for dismissal. The respondent's counter affidavit presented conflicting reasons for rejection, creating ambiguity.

The High Court scrutinized the relevant notifications and circulars governing refund claims. It highlighted the importance of fulfilling conditions like providing documents evidencing payment of appropriate sales tax/VAT and adhering to time limits for processing refund claims. The respondent's actions, such as sending a notice with short notice period and overlooking statutory requirements, were deemed as a violation of natural justice principles.

Consequently, the High Court allowed the writ appeal, setting aside the previous order and directing the appellant to submit the required documents within two weeks. The respondent was instructed to process the refund claim within four weeks of receiving the documents, emphasizing compliance with statutory provisions and principles of natural justice. No costs were awarded in this judgment.