Cape Electric Corporation Vs Commissioner of Customs (CESTAT Chennai)
Based on the CESTAT Chennai order in Cape Electric Corporation Vs Commissioner of Customs, the Tribunal examined whether SAD refund claims under Notification No.102/2007-Cus. could be denied solely due to absence or variation of endorsement in certain sales invoices, particularly when the original refund records had been misplaced by the department.
The appellant had filed three SAD refund claims totaling ₹18,82,526 in relation to imports covered by 27 Bills of Entry. The claims were initially rejected on the ground that the sales invoices lacked the prescribed endorsement regarding non-admissibility of CENVAT credit. Although the Commissioner (Appeals) remanded the matter for verification, the department subsequently misplaced the original refund files during de novo proceedings and directed the appellant to reconstruct the records. After reconstruction, the claims were again rejected because certain office copies of invoices did not contain the exact endorsement prescribed under the notification. The Commissioner (Appeals) upheld this rejection.
The appellant argued that all necessary documents had originally been furnished, including Bills of Entry, TR-6 challans, proof of VAT/Sales Tax payment, Chartered Accountant certificates, correlation statements, and sales invoices. It was contended that once the department had verified the original documents and later misplaced the records, the appellant should not suffer adverse consequences arising from reconstructed copies. The appellant also submitted that any omission of endorsement was confined to a limited number of office copies and voluntarily agreed to proportionate reduction of refund relating to those invoices. Reliance was placed on several Tribunal decisions, particularly the Larger Bench ruling in Chowgule & Co. Pvt. Ltd., to contend that the endorsement requirement was procedural and that substantive benefits could not be denied where payment of SAD and subsequent VAT-paid sales were established.
