2018 (3) TMI 30 - AT - Customs

Refund of SAD - Department was of the view that after cutting/sawing the timber logs into various smaller sizes it looses the original character and hence the sale of sawn timbers cannot be considered to be sales as such accordingly refund under the N/N. 102/2007-Cus is inadmissible - Held that - it becomes difficult to reconcile the invoices issued with the Bills of Entry wise. But, there is no variation in the total quantity imported and sold by the Appellant on which refund of 4% SAD claimed. From the analysis of the evidence on record, the appellant has not sold the goods that were imported by them as such in the local market, nor payment of the said 4% SAD is in dispute - denial of refund of 4% SAD under N/N. 102/2007-Cus dated 14.09.2007 only on the ground of mis-match between the invoices, when all other conditions of the said notification is complied with and refund of the said amount has earlier been sanctioned by the adjudicating authority to them after due verification of the records. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Discrepancy in invoices submitted for refund claims
- Eligibility for refund of Special Additional Duty (SAD) on imported Timber Logs
- Interpretation of Notification No.102/2007-Cus
- Compliance with conditions for refund under the notification
- Legal dispute regarding the character of goods after cutting/sawing

Analysis:

Discrepancy in Invoices:
The case involves a dispute arising from a discrepancy between the invoices submitted for refund claims and those issued to customers. The appellant imported Timber Logs, paid SAD, and later filed refund claims. However, discrepancies in the invoices led to a show cause notice for recovery of the refund amount. The issue was whether the invoices accurately reflected the sales of imported goods.

Eligibility for Refund of SAD:
The appellant contended that there was no dispute regarding the payment of 4% SAD at the time of import and the subsequent sale of the goods after cutting them into smaller sizes. The appellant argued that the mis-match in the invoices was due to the different representations of the quantity of logs sold after cutting. The appellant claimed that the refund was correctly sanctioned by the adjudicating authority, and there was no dispute about the payment of SAD or the sale of the imported timber logs.

Interpretation of Notification No.102/2007-Cus:
The central issue revolved around the interpretation of Notification No.102/2007-Cus, which provided for the refund of SAD on imported goods sold 'as such.' The appellant argued that the sale of sawn timber logs should still be considered 'as such' sales, citing a precedent from the Hon'ble Gujarat High Court. The Tribunal found that cutting the timber logs into smaller sizes did not change the character of the goods and upheld the eligibility for the refund under the notification.

Compliance with Conditions for Refund:
The Tribunal noted that all other conditions of Notification No.102/2007-Cus were complied with, and the refund had been earlier sanctioned after due verification. Despite the discrepancy in the invoices, the Tribunal found that the appellant had sold the goods 'as such' in the local market, and there was no dispute regarding the payment of SAD.

Legal Dispute Regarding Goods Character:
The Tribunal relied on the judgment of the Hon'ble Gujarat High Court in a similar case to support the appellant's argument that cutting the timber logs into smaller sizes did not alter the character of the goods. The Tribunal concluded that the denial of the refund based solely on the mismatch between the invoices was not justified, especially when all other conditions for the refund were met. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief as per law.