2018 (7) TMI 111 - HC - Customs

Court overturns rejection of refund application for special duty on PVC coated cloth, stresses natural justice principles.

PNP POLYTEX PVT. LTD. Versus ASSTT. COMMR OF CUS. (REFUNDS), CHENNAI

PNP POLYTEX PVT. LTD. Versus ASSTT. COMMR OF CUS. (REFUNDS), CHENNAI - 2018 (360) E.L.T. 964 (Mad.) Issues:Challenge to Order-in-Original for refund of special additional duty paid for import of PVC coated cloth; Communication of impugned order to correct address; Justification of rejection based on non-fulfillment of conditions; Compliance with principles of natural justice; Interpretation of condition regarding endorsement on the invoice.Analysis:The petitioner challenged an Order-in-Original rejecting their application for a refund of special additional duty paid for importing PVC coated cloth. The petitioner argued that the order was not communicated to the correct address, leading to a delay in knowing about the rejection. The court found that the refund application was indeed filed with the correct address, contradicting the respondent's claim of sending it to the wrong address. This discrepancy supported the petitioner's contention that the order was sent to the wrong address.The main reason for rejecting the refund application was the non-fulfillment of a condition regarding the invoice for the goods. The court noted that the invoice did not have the mandatory stamping as required by Notification No. 102/2007-Cus., which led to the rejection of the refund claim. However, the court highlighted that the petitioner was not given an opportunity for a hearing before the rejection, emphasizing the importance of principles of natural justice in such adjudicatory matters.In analyzing the significance of the condition related to the endorsement on the invoice, the court referred to a precedent set by the CESTAT in a similar case. The court emphasized that the purpose of the condition could still be achieved even without the specific endorsement on the invoice if the duty element was not specified. This interpretation supported the petitioner's argument that mere non-compliance with the rubber-stamp seal requirement should not defeat the refund claim.Considering the legal precedent and the lack of adherence to principles of natural justice, the court concluded that the application for refund should be reconsidered on its merits and in accordance with the law. The court allowed the writ petition, set aside the impugned order, and remanded the matter to the first respondent for fresh consideration, emphasizing the need for a personal hearing and proper evaluation of the submissions made by the petitioner.