2016 (12) TMI 1367 - AT - Customs

Refund claim of 4% Additional Duty of Customs (SAD) - Notification No.102/2007 - imported timber logs were sold as cut sizes - refund was rejected in regard to timber logs sold as cut sizes on the ground that there was no correlation with the goods imported and the goods sold - Held that - The appellants have presently put forward the contention that dimensions shown in the sales invoices may differ for the reason that the logs are cut to facilitate transportation. This contention is put forward in the appeal filed in the Tribunal. As the appellants were denied a show-cause notice I am of the view that this contention raised at appellate stage is acceptable - In obedience to judicial discipline following the dictum laid in the case of M/s. Variety Lumbers Pvt. Ltd. 2013 (11) TMI 1013 - GUJARAT HIGH COURT I find that the appellants are eligible for refund. The denial of refund is unjustified - Decided in favor of assessee.

Summary

Issues Involved: Refund claim denial based on discrepancy between sales invoices and import packing list under Notification No.102/2007-Cus.

Analysis:
1. Refund Claim Rejection: The appellants imported timber logs and filed refund claims under Notification No.102/2007 seeking a refund of 4% SAD paid at the time of import. The original authority partially sanctioned the refund claims, citing discrepancies between the timber logs sold and the import packing list. The Commissioner(Appeals) upheld the rejection, leading to the appeals before the tribunal.

2. Appellant's Argument: The appellant contended that they sold the entire consignments without passing the 4% SAD burden to buyers, as confirmed by a Chartered Accountant. They argued that discrepancies between the packing list and sales invoices were due to the necessity of cutting long logs for transportation, affecting the correlation between the two. The appellant relied on legal precedents to support their case.

3. Department's Position: The Department argued that refunds were only granted for logs matching the packing list, emphasizing the lack of appellant's prior explanation regarding log cutting for transportation. They maintained that the refund denial was justified based on the discrepancies between the logs in sales invoices and the import packing list.

4. Tribunal's Analysis: The tribunal noted that the order denying the refund did not provide a clear basis for determining the eligible quantity for refund. It highlighted the absence of details on how the logs differed in variety, shape, or dimension between the packing list and sales invoices. The tribunal found that the appellant's lack of a show-cause notice deprived them of a fair opportunity to present their case adequately.

5. Decision and Precedents: The tribunal ruled in favor of the appellants, allowing the refund claims based on the argument that logs were cut for transportation, leading to discrepancies between the packing list and sales invoices. Citing previous judgments, the tribunal held that the appellants were entitled to the refund, overturning the previous rejection orders. The appeals were allowed, granting consequential reliefs to the appellants.