2024 (11) TMI 1358 - AT - Customs

Rejection of Refund claim of 4% SAD levied under sec. 3(5) of the Customs Tariff Act 1975 for import of adapter plate power and control cables and APC receiver - mandatory endorsement as required under Notification No. 102/2007-Cus dated 14.9.2007 has not been made - HELD THAT - The issue is no longer res integra in the light of the Larger Bench decision in Chowgule Company 2014 (8) TMI 214 - CESTAT MUMBAI (LB) Tribunal examined a reference of a related matter as to whether to avail the benefit of Notification No. 102/2007 the condition 2(b) of the Notification is mandatory for compliance being a trader who cleared the goods on the strength of commercial invoices. The judgment went on to examine the genesis and object of the levy and the role of the exemption notification which is very useful in understanding the issue. CA s Certificate along with the reconciliation statement has been provided supports the appellants prayer for sanction of refund. The CA s certificate and Reconciliation Statement prescribed in Boards Circular is to provide a ledger/ document-based scrutiny of the claim and should ordinarily be relied upon to sanction the claim. If a serious evasion of duty was suspected physical inquiry could have been conducted by revenue with the buyers or in any other manner and the CA s Certificate along with reconciliation statement discredited while taking action to deny the claims. There would then be proper ground to reject the claim and take any other action deemed necessary. Regular cash inflows are the lifeline of a business and blocking legitimate claims on half-baked reasons without examining the developments in law does a great dis-service to business and the trade and should be avoided.

Summary

Issues:
Refund claim rejection based on non-endorsement in invoices for SAD benefit under Notification No. 102/2007-Cus.

Detailed Analysis:
The appellant filed a refund claim for 4% SAD levied under sec. 3(5) of the Customs Tariff Act, 1975 but was rejected by the lower adjudicating authority due to the lack of mandatory endorsement as required under Notification No. 102/2007-Cus. The appellant appealed, arguing that while the invoices submitted did not have the endorsement, the original/duplicate/triplicate copies did contain the necessary declarations. They also provided a certificate from a Chartered Accountant to support their claim that the burden of duty had not been passed on to customers. The appellant relied on the decision in Chowgule & Company Pvt. Ltd. v. CCE, where it was held that non-declaration in the invoice implied no CENVAT Credit availability. Additionally, they cited judgments like Schneider Electric IT Business India Pvt. Ltd. v CC, Noritsu India Pvt. Ltd. v. CC, and Petrotech Products India Pvt. Ltd. v. CC to support their argument.

The Authorized Representative (AR) reiterated the points in the impugned order. Upon hearing both parties, the Tribunal noted that the issue had been settled by the Larger Bench decision in Chowgule & Company, which examined the mandatory compliance of Condition 2(b) of Notification No. 102/2007 for SAD benefit. The Tribunal discussed the genesis and purpose of the levy of Special Additional Duty of Customs (SAD) to provide a level playing field for domestic and imported goods. It highlighted that non-declaration of duty in the invoice itself indicated no credit availability, as per Rule 9 of the CENVAT Credit Rules.

The Tribunal found that the CA's Certificate and reconciliation statement provided by the appellant supported their refund claim. It emphasized that blocking legitimate claims without proper examination of legal developments could harm businesses. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief as per law. The Tribunal stressed the importance of considering documentary evidence like CA's Certificate for claim scrutiny and avoiding arbitrary denial of claims without proper grounds.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of following legal provisions and considering supporting documents like CA's Certificates for refund claims, to ensure fair treatment and avoid undue harm to businesses.