Case Law Details
Commissioner of Customs Vs Mirc Electronics Ltd. (CESTAT Bangalore)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bangalore recently addressed an issue related to the refund of 4% Special Additional Duty (SAD) on imported goods. The case, Commissioner of Customs vs. Mirc Electronics Ltd., revolves around whether the requirement exists for Value Added Tax (VAT) Challans to display the Bill of Entry. This article provides a comprehensive analysis of the case and the CESTAT’s decision to dismiss the appeal.
1. Case Background: The case involves Mirc Electronics Ltd., which had imported goods under Bill of Entry No. 227374 dated 14.07.2008. The company cleared the goods by paying the necessary Customs duty and Rs. 49,842/- as a 4% SAD refund. Subsequently, after selling the goods, the company submitted a refund application on 06.07.2009, accompanied by supporting documents.
2. Refund Rejection and Appeal: The Customs authorities issued a deficiency memo, alleging that the company had not provided documents such as a Sale Tax Authority certificate, correlating VAT payments with the Bill of Entry, a summary of sales certified by a Chartered Accountant, and hard copies of sale invoices. Based on this, the Adjudication Authority, through Order-In-Original No. 159 of 2009 dated 16.10.2009, rejected the refund claim. Dissatisfied with this decision, the company appealed to the Commissioner (Appeals).
3. Commissioner (Appeals) Decision: The Commissioner (Appeals) issued Order-In-Appeal No. 20/2012 dated 17.02.2012, allowing the company’s appeal. The Commissioner (Appeals) concluded that the company had met the conditions of Notification No. 102/2007-Cus dated 14.09.2007. The statutory auditor of the importing company had provided certificates linking each sale invoice to the corresponding Bill of Entry, and the SAD amount was accounted for in the financial records for the year 2008-09.
4. Appeal to CESTAT Bangalore: The Revenue appealed the Commissioner (Appeals)’s decision before CESTAT Bangalore. The central issue was whether the documents provided by the company were sufficient for claiming the SAD refund under Notification No. 102/2007-Cus dated 14.09.2007 The dispute revolved around whether VAT Challans needed to display the Bill of Entry.
5. Analysis of CESTAT Bangalore’s Ruling: CESTAT Bangalore examined the facts of the case and the provisions of Notification No. 102/2007-Cus dated 14.09.2007 and Circular number 06 of 2008. The tribunal noted that the Adjudication Authority rejected the refund claim based on the absence of Bill of Entry details on the VAT Challan. However, CESTAT Bangalore determined that there was no requirement for the VAT Challan to mention the Bill of Entry number.
6. Key Findings and Decision: CESTAT Bangalore’s decision emphasized that the notification did not mandate the inclusion of the Bill of Entry number on VAT Challans. It highlighted that the Chartered Accountant’s certificate, detailing the correlation between sale invoices and Bill of Entry, sufficed to meet the conditions of the notification. Therefore, the appeal was dismissed, affirming the Commissioner (Appeals)’s decision.
7. Conclusion: The case of Commissioner of Customs vs. Mirc Electronics Ltd. before CESTAT Bangalore provides clarity regarding the refund of 4% Special Additional Duty (SAD) on imported goods. The tribunal’s decision underscores that VAT Challans do not need to display the Bill of Entry number to claim the refund, and a Chartered Accountant’s certificate linking sale invoices to Bill of Entry suffices. This judgment serves as an essential precedent for businesses seeking SAD refunds, ensuring compliance with notification requirements.
FULL TEXT OF THE CESTAT BANGALORE ORDER
The issue in the present appeal is regarding refund of 4% of Special Additional Duty (SAD) in terms of Notification No.102/2007-Cus dated 14.09.2007. The respondent had imported goods against the Bill of Entry No.227374 dated 14.07.2008 and goods were allowed to clear on payment of appropriate Customs duty and also on payment of Rs.49,842/- as 4% SAD refund. After sale of good, the respondent submitted a refund application on 06.07.2009 with the supporting documents. Alleging that the respondent failed to produce documents like Sale Tax Authority certificate, certifying the VAT paid correlating with the Bill of Entry, summary of sales certified by the Chartered Accountant, hard copy of the sale invoices etc., deficiency memo was issued. There after, Adjudication Authority vide Order-In-Original No.159 of 2009 dated 16.10.2009 rejected the refund claim on the ground that the respondent failed to submit necessary documents. Aggrieved by the said order, respondent filed appeal before the first Appellate Authority. The Commissioner (Appeals) vide Order-In-Appeal No.20/2012 dated 17.02.2012 allowed the appeal. While disposing the appeal, the Commissioner (Appeals) observed that since statutory Auditor of the importer company furnished Certificates dated 26.06.2009 with details linking each of the sale invoices with the corresponding Bill of Entry, the respondent complied with the conditions of the notification. It is also observed that the amount collected as SAD has been entered in the final accounts for the year 2008-09. Aggrieved by the said order present appeal is filed by Revenue.
2. Learned D.R. appearing on behalf of the appellant submitted that the documents furnished by the respondent to claim the refund of SAD is not sufficient as per the Notification No. 102/2007-Cus dated 14.09.2007 and Circular number 06 of 2008. Learned counsel for the respondent submitted that they have complied with the conditions imposed in the said notification since production of certificate from Chartered Engineer is only required and appellant cannot insist for any other documents.
3. Heard both the sides. As per the Order-In-Original, the respondent produced documents and when objection was made, the representative of the respondent appeared for personal hearing and produced VAT Challan and Chartered Accountant’s Certificate. However, VAT Challan does not show the Bill of Entry and for that reason it is concluded that the respondent failed to comply with the conditions stipulated in the notification. In appeal, while allowing the appeal, the Appellate Authority has given a very detailed order. Even as per the statement of fact in the present appeal, the appellant admits that the respondent had produced VAT Challans and Chartered Accountant Certificate. Only objection is that said VAT Challan could not be correlated with the imported goods as per the Bill of Entry. There is no requirement for mentioning Bill of Entry number in the Sale Tax/VAT Authority on the sale of goods and certificate of Chartered Accountant with details linking each of the sale invoices with the corresponding Bill of Entry alone is sufficient for said correlation. Thus we find no reason to interfere with the order passed by the Appellate Authority. Hence appeal is dismissed.
(Order pronounced in the Open Court on 05.09.2023)
