Palfinger Cranes India Pvt. Ltd. Vs Commissioner of Customs (Exports) (CESTAT Chennai)
In a significant ruling by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Chennai, the court addressed a procedural lapse concerning the refund of Special Additional Duty (SAD) paid on imported goods. The case, Palfinger Cranes India Pvt. Ltd. vs. Commissioner of Customs (Exports), centered on whether a company could be denied a SAD refund solely for failing to include a specific endorsement on its commercial invoices.
The dispute arose after Palfinger Cranes India Pvt. Ltd. imported cranes and crane parts and subsequently sought a refund of the 4% SAD paid, in line with Notification No. 102/2007-Cus. The customs authorities rejected the refund claims, citing the company’s failure to comply with a mandatory condition of the notification, which required a specific endorsement on the sales invoices stating, “no CENVAT credit would be admissible in respect of 4% CVD.”
Palfinger Cranes appealed the decision, arguing that the failure to include the endorsement was a minor procedural lapse. The company’s counsel contended that the fundamental purpose of the notification was to prevent importers from getting a “double benefit”—both a SAD refund and a CENVAT credit. The counsel asserted that since the company had not availed any CENVAT credit, the intent of the law was fulfilled. The company also presented evidence of having paid the required Sales Tax (ST) and Value Added Tax (VAT) on the subsequent sale of the imported items.
