2022 (1) TMI 915 - AT - Customs

Refund of SAD - mismatch of description of the goods in the bill of entry and in the subsequent sale invoices, through which Sales Tax/VAT payment were acknowledged - no correlation between products imported and product sold - HELD THAT - It is a common knowledge that while raising invoices short forms are mostly used by the staff to save time and space and to a prudent man it would not appear irrational if Prime Hot Rolled Alloyed Steel in Coils are written as HR Coil cut in to length as its short forms since cut into pieces and Cold Rolled non alloy steel sheet in coil is written as C.R. Coils , that to when a Chartered Accountant/Statutory Auditor Certificate establishing correlation is in existence, which apart from the Clarificatory Circular No. 06/2008-Cus., can also be accepted as a piece of evidence under Section 45 of the Indian Evidence Act as being opinion of export. The decision rendered by the Hon'ble High Court of Madras in the case of JOHNSON LIFTS PVT. LTD. VERSUS ASSTT. COMMR. OF CUS. (REFUNDS) , CHENNAI 2021 (2) TMI 401 - MADRAS HIGH COURT that has clearly stipulated that the respondent-department is bound to accept the description of goods in the import documents as well as sale invoice to be one and the same, on the strength of the certificate/correlation statement issued by the Statutory Auditor (Chartered Accountant). Denial of refund of SAD is hereby set aside. The appellant is entitled to get a refund of ₹ 6,48,118/- and ₹ 1,97,740/- respectively with applicable interest and the respondent-department is directed to pay the same within a period of 3 months from the date of receipt of this order - Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of refund of SAD due to mismatch of goods description in bill of entry and sale invoices.

Analysis:
1. Factual Background: The appellant, an importer, imported "Prime Hot Rolled Alloyed Steel in Coils" which was later sold as "HR Coil cut into length." Refund of SAD was initially allowed but later denied by the Commissioner (Appeals) citing lack of correlation between the imported and sold products, including quantity discrepancies.

2. Legal Provisions: The case involved Notification No. 102/2007-Cus. and its clarificatory circular emphasizing the need for documents linking payment of ST/VAT with the sale invoices. The circular specified that a certificate from a Chartered Accountant correlating the tax payment with the sale invoices is acceptable evidence.

3. Submissions and Evidence: The appellant argued that using short forms in invoices, like "HR Coil cut into length" for "Prime Hot Rolled Alloyed Steel in Coils," was reasonable practice. The Chartered Accountant certificate provided further evidence of correlation between imported and sold goods, despite minor description differences. Case laws were cited to support the argument that such discrepancies should not disqualify the appellant from refund benefits.

4. Judicial Precedent: Referring to the decision of the High Court of Madras in Johnson Lifts Pvt. Ltd. case, it was established that the description of goods in import documents and sale invoices should be considered the same when supported by a Chartered Accountant certificate, aligning with the statutory requirements.

5. Decision: In line with the judicial precedent and legal provisions, the Tribunal allowed the appeals, overturning the Commissioner's denial of refund. The appellant was granted refunds of ?6,48,118 and ?1,97,740 respectively, with applicable interest, and the respondent-department was directed to make the payments within three months of the order date.

This detailed analysis of the judgment highlights the key issues, legal provisions, arguments presented, judicial precedent, and the final decision reached by the Appellate Tribunal.