Introduction: In a recent landmark case, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai ruled in favor of Doosan Infracore India Pvt. Ltd., dismissing the appeal of the Department of Revenue, Commissioner of Customs. The contention pertained to the refund of the Special Additional Duty (SAD) on the ground of the disclosure of relevant documents.
Analysis: The respondent, Doosan Infracore India Pvt. Ltd., had filed for a refund of the SAD under Notification No. 102/2007-Cus. The department appealed against the sanction of the refund, arguing that the Chartered Accountant’s Certificate provided by Doosan did not clearly articulate whether the duty burden was transferred elsewhere.
The key point of contention was whether the certificate covered the months of February and March 2011, as the department argued it pertained only to the period from April to June 2011. This question was particularly relevant as the duty for the goods was paid from February 2011 to June 2011, and the goods were sold from April 2011 to June 2011.
However, the Commissioner (Appeals) dismissed the department’s argument as “absurd”, stating that accounting procedures usually include past periods. Furthermore, the department did not present any evidence to challenge the credibility of the Chartered Accountant certificate.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The above appeal is filed by the Department against the Order-in-Appeal No. 1465/2013 dated 09.10.2013 passed by refund sanctioning authority who sanctioned the refund claim filed by the respondent in terms of Notification No.102/2007-Cus. dated 14.09.2007, as amended by Notification No.93/2008 dated 01.08.2008.
2. Brief facts are that respondent had filed refund claim for refund of the SAD (Special Additional Duty) under Notification No. 102/2007-Cus. After due process of law, the original authority sanctioned the refund claim holding that the respondent had produced all necessary documents. The Department was of the view that the original authority ought not to have granted the refund as the Chartered Accountant’s Certificate submitted by the respondent did not clearly state as to whether the duty burden was passed on to another. Against sanction of refund an appeal was filed by the Department before the Commissioner (Appeals), who vide order impugned herein upheld the sanction of refund. Hence, the Department is now before the Tribunal.
3.1 Shri R. Rajaraman, Ld. Authorized Representative, appeared and argued for the Department. The grounds-of-appeal were reiterated.
3.2 It was submitted by the Ld. Authorized Representative that the duty of the goods imported by the respondent was paid during the period from February 2011 to June 2011 and the goods were sold during the period from April 2011 to June 2011. The refund claim was filed on 27.12.2011. The Chartered Accountant, in his certificate, stated that 4% Additional Duty being claimed as refund, had been shown in the books of account / balance sheet for the period from April 2011 to June 2011 as “receivables” under the sub-heading “Loans and Advances” under the Head “Current Assets”. The Ld. Authorized Representative has argued that though the certificate indicated that the Chartered Accountant had verified the books of account for the period from April to June 2011, it was not clear whether the books of accounts for the months of February and March 2011 were scrutinized; the Chartered Accountant has issued the certificate for the entire claim without verifying the books of account for the month of February and March 2011. That the refund sanctioned on the basis of the above certificate is not legal and proper. The Ld. Authorized Representative therefore prayed that the appeal may be allowed.
4. None appeared for the respondent even though notice was issued by Registered Post. The matter is taken up for disposal after hearing the Ld. Authorized Representative for the Revenue and after perusal of the records.
5. The only ground raised in the appeal is whether the certificate issued by the Chartered Accountant is proper, so as to sanction the refund claim. In paragraph 13 of the Order-in-Original dated 08.01.2014, the adjudicating authority has analyzed the certificate issued by the Chartered Accountant, as under: –
“13. Category under which the claimant’s Chartered Accountant is classified as specified in the Board’s Circular.
The Chartered Accountant of the Claimant, M/s. Deloitte Haskins & Sells has certified that they are the Statutory Auditors/Chartered Accountants of M/s. Doosan Infracore India Private Limited and who certify the financial statements/Returns as per Companies Act 1956”
6. It is thus seen that the adjudicating authority has gone through the certificate issued by the Chartered Accountant and has held that it is in accordance with the Board Circular No.
7. The objection raised by the Department is that the certificate pertains to the period from April to June 2011 and hence, the Bills-of-Entry pertaining to the period from February to March 2011 are not covered by the certificate. We are not able to understand as to how such a contention is raised by the Department.
8. The discussion by the Commissioner (Appeals) on this point is in paragraph 5 of the impugned order, is as under: –
“5. I have carefully gone through the case records and the submissions made by the Respondent. The objection raised by the Department prima facie looks absurd on the face of their own admission. The objection of the department was that the CA certificate was pertaining to the period from April to June 2011 and hence the Bs/E pertaining to the period from February’ to March’2011 were not covered by the said certificate. It is a common knowledge in the accounting procedure that the books of accounts which covers a period includes the past period also, until unless amount wise or figure wise it is proved that certain amount/figure covering the past period was not indicated in the accounting period. The Department had not come out with any such facts and figures. On the other hand the lower authority categorically stated in the impugned order that the CA certificate covering certain period included the UJE aspect for the entire claim. Hence, there is no substance in the Department’s appeal”.
9. Apart from stating that the Chartered Accountant has not verified the duty paid for the period from February to March 2011, there is no evidence put forth by the Department to disprove the credence of the Chartered Accountant certificate.
10. We find no merits in the appeal filed by the Department. The same is dismissed.
(Order dictated and pronounced in open court on 13.07.2023)