Case Law Details
Shriram Impex India Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
Shriram Impex India Pvt. Ltd. filed an appeal challenging the rejection of its refund claim for Special Additional Duty (SAD) paid on imports, based on four Bills of Entry dated May 31, 2011. While the original authority sanctioned the refund, the Commissioner of Customs reversed this decision, citing issues with the Chartered Accountant’s certificate regarding unjust enrichment. The appellant argued that the certificate was consistent with the relevant invoices and documents, demonstrating that the SAD had not been passed on to customers. The CESTAT noted that the Commissioner (Appeals) had failed to grant a personal hearing despite a request, which was detrimental to the case. On merits, the Tribunal found that the appellant had substantiated its claim with proper documentation, including VAT payments and sales invoices. Additionally, it held that the conditions under Notification No. 102/2007 had been met, and a case of unjust enrichment did not arise. Therefore, the Tribunal quashed the rejection of the refund claim, setting aside the impugned order and allowing the appeal with consequential relief.
FULL TEXT OF THE CESTAT CHENNAI ORDER
This appeal is filed by the appellant M/s. Shri ram IPEX India Pvt. Ltd. against Order in Appeal No. Cactus No.1564/2014 dated 26.08.2014, passed by the Commissioner of Customs, Chennai.
2. Brief facts of the case are that M/s. Shri Ram IPEX (India) Pvt. Ltd., New Delhi filed a claim of refund for the Special Additional Duty (SAD) paid. The Lower Adjudicating Authority sanctioned the refund amount. Among several Bills of Entry upon which the refund was claimed and sanctioned, the department preferred an appeal with respect to 4 Bill of Entries i.e. 3658339, 3658340, 3665432 and 3658338 all dated 31.05.2011. The learned Commissioner (Appeals) by the impugned order allowed the appeal and reversed the finding of lower adjudicating authority. Aggrieved by the said order the appellant is before me
3. Shri Derrick Sam, Learned Counsel appeared for the appeared for the appellant Shri N. Satyanarayanan, Learned Authorised Representative appeared for the respondent.
3.1 The Learned counsel for the appellant submitted that the Commissioner (Appeals) before passing the impugned order failed to give a personal hearing to the appellant though a representation was made through counsel. The Ld. Counsel for the appellant also submitted that in the grounds of appeal filed by the Department before Commissioner (Appeals), it was stated that the Chartered Accountant’s certificate on unjust enrichment was given based on the trial balance for the period 01.04.2011 to 3 1.05.2011, whereas with respect to the 4 bills of entry cited above, the duty was paid in the month of June 2011. Therefore, the subject 4 bills of entry are not covered by the Chartered Accountant Statement. The learned Counsel stated that the duty for the four bills of entry were initially debited in DEPB script while filing the bills of entry i.e. on 31.05.2011 and the remaining duty was paid on the next day. The Commissioner (Appeals) failed to consider that the Charted Accountant’s Certificate mentioned that the duty element namely the 4% SAD has not been passed on to the customers. Further, it is only an additional document to evidence that such duty not been passed on to the customers. The Charted Accountant’s Certificate clearly corroborates the ledger accounts and the sales invoices with the relevant Bills of Entry. All this will substantially prove that the 4% SAD has not been passed on to the customers. Therefore, it would suffice the requirement of Circular No.6/2008 dated 28.04.2008 and 16/2009 dated 13.10.2008. The refund claim was correctly filed under Notification No.102/2007 and the Original Authority has properly appreciated the contents of the refund claim while sanctioning the same. The Ld. Counsel further submitted that there is no dispute that the appellant has paid the VAT on all the goods and further all the local invoices contain an endorsement that “No credit of Additional Duty of Customs levied under sub-section (5) of section 3 of he Customs Tariff Act, 1975 have been availed/shall be admissible”. Therefore, the conditions prescribed under Notification No. 102/2007 dated 14.09.2007 have been complied with and hence, the impugned order rejecting refund of the subject 4 bills of entry is liable to be set aside. He prayed that the appeal may be allowed.
3.2 The learned Authorized Representative for the respondent reiterated the findings of the authorities below.
4. I have carefully gone through the appeal and have heard both the parties. I find that the fact that no personal hearing was given to the appellant by the Commissioner (Appeals) inspire of a request for the same is itself fatal to revenue’s case. On merit, I find that the appellant has satisfactorily explained that duty for the four bills of entry were initially debited in DEPB script while filing the bills of entry i.e. on 31.05.2011 and the remaining duty was paid on the next day. The same was also easily verifiable from the documents submitted. There is no dispute that the appellant has paid the VAT on all the goods and “No credit of Additional Duty of Customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 have been availed/shall be admissible” is endorsed on the invoices. This being so, a case of unjust enrichment does not arise and the conditions prescribed under Notification No. 102/2007 dated 14.09.2007 have been complied with. Hence, the impugned order rejecting refund of the subject 4 bills of entry is liable to be set aside even on merits.
5. The Hon’ble Madras High Court in its judgment in P.P. Products Ltd. v. Commissioner ² 2019 (367) E.L.T. 707 (Mad.), examined whether the Tribunal, in the face of documentary evidence produced by the appellant, was correct in setting aside the order of the Appellate Authority, holding that there was no correction between the imports and subsequent sales? It held as under;
10. We find that there are three documents which the importer has to produce for being entitled for refund of SAD, they being, (i) document evidencing payment of the said additional duty; (ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods. The adjudicating authority appears to have done a thorough scrutiny of the documents and granted refund for substantial portion of the claim. In respect of the remaining portion, the only reason for rejection is that the appellant has not adopted the same code while describing the product in their sale invoices. The explanation offered by the appellant/importer is that the numbers which followed the letters HDPE/LDPE/LLDPE are relevant only for person who is importing goods from the foreign country on orders being placed by the appellant and is of no consequence on the sale while selling the product in the local market. In our considered view, the adjudicating authority has not come to a conclusion that the product sold was entirely different. In fact, there was nothing on record to disbelieve the Chartered Accountant’s certificate which certified that both products are one and the same. If the adjudicating authority had to disbelieve such certification, then there should have been material to do so. However, the larger question would be whether at all such jurisdiction is vested with the adjudicating authority, when there is no allegation of any fraud or misrepresentation against the appellant.
(emphasis added)
6. In the circumstances, the impugned order rejecting the refund claims is not proper. The same is hence set aside. The appeal is allowed with consequential relief, as per law. The appeal is disposed of accordingly.
(Order pronounced in open court on 08.10.2024)
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