N.R. Colours Ltd Vs Commissioner of Customs (CESTAT Chennai)
Conclusion: Refund of Special Additional Duty (SAD) could not be denied merely because commercial invoices did not carry the endorsement required under Notification No. 102/2007-Customs, when all other substantive requirements were satisfied.
Held: Assessee-company had imported certain chemicals during 2013 and paid 4% SAD. The company later claimed a refund of Rs. 3,10,795 under the said notification. The refund was rejected by Adjudicating authority, and Commissioner (Appeals) upheld the rejection on the ground that some sales invoices lacked the mandatory endorsement stating that no credit of additional duty would be admissible. Assessee-company argued that the invoices had been properly endorsed and, even if not, the omission was procedural. Revenue maintained that verification at the buyers’ end showed the endorsement was missing, justifying rejection. Revenue argued that both the adjudicating authority and the Commissioner (Appeals) had verified the sales invoices and found that they did not contain the endorsement required under paragraph 2(b) of Notification No. 102/2007-Customs. Hence, the refund claim was correctly rejected. It was held that following the decision in Chowgule & Company Pvt. Ltd. v. Commissioner of Customs & Central Excise [2014 (8) TMI 214 – CESTAT Mumbai (LB)] a trader-importer who paid SAD and subsequently discharged VAT or sales tax on resale would be eligible for refund under Notification No. 102/2007-Customs, even if the commercial invoices did not carry the endorsement, provided all other conditions were met. Absence of endorsement could not defeat the refund claim when other substantive requirements were fulfilled. Tribunal pointed out that judicial discipline required following the Larger Bench decision. Appellant had paid the applicable duties and taxes and had not passed on the duty burden to buyers. Tribunal set aside the appellate order and allowed the appeal with consequential relief.
