2018 (4) TMI 1254 - AT - Customs

Tribunal overturns refund claim rejections, cites minor discrepancies not grounds for denial

The Tribunal allowed all appeals, overturning the rejection of refund claims under Notification No.102/2007-Cus. The discrepancies in descriptions between ... Refund of SAD - rejection on the ground that invoice did not contain the endorsement as required under para 2(b) of notification declaring that no Cenvat credit is admissible on the SAD paid - Held that: - The said issue stands covered by the decision in the case of Chowgule & Company Pvt Ltd Vs CC & CE [2014 (8) TMI 214 - CESTAT MUMBAI (LB)], where it was held that Condition relating to endorsement on the invoice was merely a procedural one and the purpose and object of such an endorsement could be achieved when the duty element itself was not specified in the invoice. Since the object and purpose of the condition is achieved by non-specification of the duty element the mere non-making of the endorsement could not have undermined the purpose of the exemption - rejection of refund claim on this ground is unjustified and requires to be set aside. Refund claim also rejected on the ground that description of the goods in the Bill of Entry does not match with the description of goods in the sales invoice - Held that: - The mere mention of grades of plastic granules in the sales invoice cannot be a ground to deny the substantive benefit of refund, when there is no dispute that appellant has sold the very same goods that have been imported - issue stands covered by the decision in the case of CC, Chennai vs Shri Ram Impex India (P) Ltd. [2013 (11) TMI 1354 - CESTAT CHENNAI], where it was held that There is no condition in the Notification that the Bill of Entry number should be mentioned in the sale invoice - refund to be allowed. Refund also rejected on the ground that appellant has not produced the consignment sale agreement copy - Held that: - When there is no dispute to the discharge of VAT/Sales Tax, the department cannot reject the refund claims, stating that there is no evidence to show that the liability to pay sales tax is fixed on appellant as per agreement - refund cannot be rejected. Appeal allowed - decided in favor of appellant. Issues Involved:Refund claim rejection under Notification No.102/2007-Cus. Dt.14/9/2007 as amended.Analysis:1. Issue of Description Discrepancy in Bill of Entry and Sales Invoices:- The main contention was the difference in the description of goods between the Bill of Entry and sales invoices. The appellant imported various grades of plastic granules but the sales invoices mentioned only generic terms like plastic granules. The Tribunal held that minor differences in descriptions do not negate the right to a refund. It was emphasized that the goods imported were the same as those sold, and the rejection based on this ground was deemed incorrect.2. Proof of Consignment Sale Agreement:- The Commissioner (Appeals) rejected refund claims in some cases due to the absence of proof regarding consignment sale agreements. However, the Tribunal noted that in one instance, the appellant had submitted the consignment sale agreement copy. The rejection on this ground was considered baseless as there was no dispute regarding the discharge of VAT/Sales Tax.3. Endorsement Requirement in Invoices:- Another reason for rejection was the absence of required endorsements in the invoices regarding Cenvat credit admissibility on SAD paid. The Tribunal referred to a precedent to rule that such rejection was unjustified, and the refund claim should not be denied based on this ground.4. Liability to Pay Sales Tax in Consignment Sale Agreement:- In cases where the rejection was due to the absence of specific mention in the consignment sale agreement about the liability to pay sales tax, the Tribunal found the rejection unfounded. It was clarified that when there was no dispute over the payment of sales tax, the absence of explicit agreement clauses did not justify the rejection of refund claims.5. Overall Decision:- The Tribunal set aside the impugned orders, allowing all the appeals with consequential reliefs. The decisions were based on the findings that the reasons for rejection provided by the Commissioner (Appeals) did not hold ground legally, and the appellants were entitled to the refunds as claimed.This detailed analysis covers the key issues addressed in the judgment, highlighting the legal reasoning and outcomes for each aspect involved in the refund claim rejections under the specified notification.