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2023 (7) TMI 778 - AT - CustomsRefund of SAD - Rejection on the ground that there was no endorsement as required under Para 2(b) of the Notification No.102/2007-Cus. Dated 14.09.2007 to the effect that No credit of the additional duty of customs levied under sub-section (5) of Section 3 of the Customs Tariff Act.1975 shall be admissible on invoices - rejection also on the ground of non-accounting of SAD amount in 2008-09 and the correction was made in the accounting year 2009-10 by showing the SAD due amount as receivable in their books of account - violation of principles of natural justice. HELD THAT - It is a case where the appellant had imported the goods by paying additional duty and the value of the goods supplied to M/s Power Grid Corporation of India Ltd was fixed way back in 2008. It has been clearly agreed and understood between the buyer and seller that no other tax other than octroi and entry tax would only be charged and reimbursed by the buying entity. In transactions between the parties for the previous period, the price of the goods was the same and the Adjudicating Authority allowed refund of Rs.38,81,529/- vide Order-in-Original dated 14.05.2011 dated 14.06.2011. The goods in both the cases used in transmission of electricity were sold under same LOA. As far as refund of SAD is concerned, there are catena of decisions by various Tribunals, which have categorically held that refund cannot be denied on technical infirmity. Board s Circular No.18/2010 dated 08.07.2010 clarifies that production of books of account is not be insisted and only certificate from Chartered Accountant is sufficient to allow refund. In the appellant s case at the time of filing of refund claim, the appellant submitted Chartered Accountant certificate showing the amount as receivable in the books of account. Once the assessee has complied for the said requirement, and considering the terms of the contract between the parties, the refund cannot be rejected on the ground of unjust enrichment. Appeal allowed.
Issues Involved:
1. Non-compliance with Notification No.102/2007-Cus regarding invoice endorsement. 2. Non-accounting of SAD amount in the financial year 2008-09. 3. Unjust enrichment and procedural compliance for refund claims. Summary: Issue 1: Non-compliance with Notification No.102/2007-Cus regarding invoice endorsement The appellant's refund application for the Additional Duty of Customs (SAD) was initially rejected because the invoices did not contain the required endorsement stating "No credit of the additional duty of customs levied under sub-section (5) of Section 3 of the Customs Tariff Act.1975 shall be admissible."¯ The Tribunal referenced several cases, including M/s Novo Nordisk India Pvt. Ltd. and M/s Chowgule & Company Pvt. Ltd., which established that the absence of such an endorsement is a procedural lapse and does not undermine the substantive right to refund. The Tribunal emphasized that since the appellant is not a registered dealer and the invoices did not indicate the SAD paid, the purpose of the declaration was achieved, and the refund should not be denied on this ground. Issue 2: Non-accounting of SAD amount in the financial year 2008-09 The appellant's refund claim was also rejected because the SAD amount was not shown as receivable in their books for the year 2008-09 but was corrected in the subsequent year. The Tribunal, referencing the case of M/s Systronics (India) Ltd., held that the requirement to show the refund claim as receivable in the books of account is not stipulated in Notification No. 102/2007 or subsequent Circular No. 18/2010. The Tribunal ruled that the Chartered Accountant certificate is sufficient for the refund claim, and technical lapses in accounting should not bar the substantive benefit of the refund. Issue 3: Unjust enrichment and procedural compliance for refund claims The Tribunal concluded that the appellant had complied with the necessary conditions by submitting a Chartered Accountant certificate. It was also noted that the price of the goods sold to Power Grid Corporation of India Ltd. was agreed upon in 2008, and no other taxes were to be charged or reimbursed. The Tribunal found that the appellant had not passed on the burden of SAD to the buyer, thus negating unjust enrichment. The Tribunal cited multiple precedents to support that refunds should not be denied due to procedural or technical infractions when the substantive conditions are met. Conclusion: The Tribunal set aside the impugned order and allowed the appeal with consequential relief, emphasizing that the refund of SAD should not be denied on procedural grounds when the substantive requirements are fulfilled.
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