2021 (9) TMI 969 - AT - Customs

Rejection of refund claim - Mismatch of re-imported defective goods - Seeking amendment in the Bill of Entry - Section 128 A (3) of Customs Act, 1962 - HELD THAT - Initially the Original Adjudicating Authority had failed to consider the verification report dated 29.04.2015 and ignored the re-examination of goods due to which the Commissioner (Appeals) vide Order of 20.07.2018 had remanded back the matter. Post re-consideration also the proposal in Show Cause Notice has been confirmed and the refund claim of ₹ 1,76,905/- has been rejected on the ground of alleged mismatch of the goods. Commissioner (Appeals) also vide the Order-under-challenge has rejected the appeal holding that appellant has not explained the reason and has not convinced the Department for mismatch of description of goods in the Invoice submitted by the appellant with the check-list of Bill of Entry. Alleged mismatch in description of goods - HELD THAT - It cannot be denied by the Department nor actually has been denied that it is the invoice of January, 2015 only which was got compared with both said Invoices of 2014. In view thereof the initial findings that the re-examination report did not reveal anything about the description of goods vis- -vis Invoice No.FACTU 20150005 are apparently wrong on the face of its record. The said findings of Original Authority have been confirmed in verbatim by Commissioner (Appeals) vide the Order-under-challenge. Accordingly, it would be appropriate to hold that the Adjudicating Authority below has ignored the verification report prepared by the Department itself which to my opinion is sufficient reason to falsify the allegations in the Show Cause Notice about mismatch. Since the refund claim has been rejected only on ground of alleged mismatch which Departments own reports falsifies, the appellant is held entitled for the impugned refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim based on alleged mismatch of goods description in invoices.
2. Consideration of verification report in the decision-making process.

Issue 1: Rejection of refund claim based on alleged mismatch of goods description in invoices

The case involved a dispute regarding the rejection of a refund claim of &8377; 1,76,905/- filed by the appellant under Section 128 A (3) of the Customs Act, 1962. The dispute arose from the re-import of defective and rejected goods along with other items exported for exhibition purposes. The Department alleged that the description of the re-imported defective goods did not match the description in the relevant invoice. The Original Adjudicating Authority initially confirmed the rejection of the refund claim. However, upon appeal, the matter was remanded for re-examination. The subsequent Order-in-Original maintained the rejection of the refund claim, which was upheld in the order under challenge by the Commissioner (Appeals).

Issue 2: Consideration of verification report in the decision-making process

The appellant argued that there was no difference between the exported and re-imported goods, emphasizing a verification report supporting this claim. It was contended that the confusion arose due to filing a common Bill of Entry for both types of goods. The appellant asserted that the authorities failed to consider the verification report adequately, leading to the rejection of the refund claim. On the other hand, the Department argued that the onus was on the appellant to provide evidence disproving the alleged mismatch in goods description. Despite the verification report, the Department maintained that the appellant failed to explain the alleged discrepancy adequately.

In the judgment, the Member (Judicial) analyzed the case meticulously. It was observed that the Department's verification report confirmed the identity of goods as declared in the relevant invoices, contradicting the allegation of a mismatch. The Member noted that the initial findings and subsequent decisions had erroneously overlooked this crucial verification report. Consequently, the order under challenge was set aside, and the appellant was deemed entitled to the refund claim due to the Department's own reports refuting the alleged mismatch. The appeal was allowed, granting the appellant consequential benefits.

This detailed analysis of the judgment highlights the critical issues of the case and the reasoning behind the decision to set aside the rejection of the refund claim.