2017 (10) TMI 1202 - AT - Customs

Tribunal clarifies refund eligibility for works contract materials & DEPB scrip usage.

Commissioner of Customs (Appeals) -Ahmedabad Versus Proflex Systems

The Tribunal remanded the appeals to the Adjudicating Authority to verify sales against works contract and in coil or sheet form for refund eligibility. ... Refund of SAD - N/N. 102/2007-CUS dtd 14.9.2007 - imported goods sold in Coil or sheet form - denial on the ground that appellant had sold the goods which are different from the goods imported - cash refund - Held that: - we could not find detailed bifurcation of the sales against ‘works contract’ and as such sale of coils or sheets, submitted earlier before lower authorities along with evidence, in support of their claim, now advanced before this forum. Therefore, to ascertain the clearance of imported coils or sheets as such against invoices, the matter needs to be remanded to the Adjudicating Authority. It is made clear that the appellant would not be entitled to refund of the 4% SAD paid, when such supplies were against works contract for installation of the roofing material made out of imported goods in the premises of the customers/buyers. In the event the amount of SAD was paid by using DEPB scrip at the time of its import, refund could be allowed in cash. Appeal allowed by way of remand. Issues:1. Admissibility of refund of 4% SAD on imported goods sold in Coil or sheet form.2. Entitlement to refund of SAD amount in cash when initially paid at the time of import using DEPB scrip/credit.Analysis:1. The appeals involved a dispute regarding the refund of 4% SAD on imported goods sold in Coil or sheet form. The appellant imported 'Prime Quality Pre-painted Aluminium Zinc Alloy Coated Steel Sheets in Coil' and later claimed a refund of 4% SAD under Notification No.102/2007-CUS. The authorities rejected the refund claims, alleging that the goods sold were different from the imported ones. The Ld. Commissioner (Appeals) allowed the refund claim, stating that the goods sold were in the same form as imported. The appellant argued that they sold the imported material in coil or sheet form besides converting it into roofing material under works contract. The Tribunal remanded the matter to ascertain the sales against works contract and those in coil or sheet form for refund eligibility.2. The second issue revolved around the entitlement to a cash refund of the SAD amount paid initially using DEPB scrip/credit. The appellant contended that the cash refund should be allowed based on a judgment of the Hon'ble Delhi High Court. The Tribunal upheld the appellant's claim for cash refund, citing the High Court's ruling that circulars imposing additional restrictions for refund under Notification No.102/2007-Customs were invalid. Consequently, the Tribunal remanded the appeals to determine the quantum of imported material sold in coil or sheet form for refund eligibility and allowed the refund in cash if the SAD was paid using DEPB scrip.In conclusion, the Tribunal remanded the appeals to the Adjudicating Authority for detailed verification of sales against works contract and in coil or sheet form for refund eligibility. The judgment clarified that the appellant could not claim a refund for materials converted into roofing under works contract but could seek a cash refund if the SAD was initially paid using DEPB scrip. The Revenue's appeal was dismissed, and the appellant's appeals were allowed by way of remand for further assessment.