2019 (5) TMI 829 - HC - Customs

High Court overturns Tribunal and Customs Commissioner decisions, deems refund claim valid, answers in appellant's favor.

The High Court allowed the appeals filed by the appellant, setting aside the orders of the Tribunal and the Commissioner of Customs (Appeals). The Court ... Refund of SAD - N/N. 102/2007 dated 14.09.2007 - compliance with Condition No.2 (e) (iii) of Notification - correlation of 'goods imported' versus 'goods sold in India' - HELD THAT:- A Notification which grants refund was an exemption notification, should be construed strictly and the conditions contained should be scrupulously adhered to. There are three documents which the importer has to produce for being entitled for refund of SAD, they being, (i) document evidencing payment of the said additional duty; (ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods. The adjudicating authority appears to have done a thorough scrutiny of the documents and granted refund in full - The findings of the first appellate authority and the Tribunal are not sustainable, considering the facts and circumstances of the case, as the adjudicating authority himself was satisfied that amount of claim for refund in full was sustainable. Appeal allowed - decided in favor of appellant. Issues Involved:1. Jurisdiction of the Tribunal contrary to Customs Act, 19622. Dismissal of Appeal No.C/40787/2016 by the Tribunal3. Timely filing of appeal by the Revenue4. Commissioner of Customs (Appeals) jurisdiction on goods classification5. Justification of dismissing appeals by the Tribunal6. Mismatch between description of imported goods and goods sold in India7. Curability of discrepancy in goods for refund eligibility8. Strict interpretation of exemption notification conditions9. Documents required for SAD refund entitlement10. Sustainability of first appellate authority and Tribunal's findingsDetailed Analysis:1. The first issue raised was whether the Tribunal had the jurisdiction to hear Appeal No.C/40787/2016, contrary to Section 129C(4)(b) of the Customs Act, 1962. The Tribunal dismissed the appeal ex parte, leading to the second issue of the correctness of this action. Additionally, the third issue involved determining if the Revenue filed the appeal within the prescribed limitation under Section 129D of the Customs Act, 1962.2. The core issue was whether the Tribunal's dismissal of appeals by the appellant/importer was justified. The appellant sought a refund of Special Additional Duty (SAD) for various imported goods, citing specific notifications and circulars. The Commissioner of Customs (Appeals) and the Tribunal found discrepancies between the goods imported and those sold in India, leading to the dismissal of the appeals.3. The mismatch in goods description between 'goods imported' and 'goods sold' formed a crucial aspect of the case. The Tribunal held that this discrepancy was not curable, raising questions about the eligibility for refund. The strict interpretation of exemption notification conditions, particularly Notification No.102/2007-Cus dated 14.09.2007, was emphasized by the learned counsel for the Revenue.4. The documents required for SAD refund entitlement included evidence of duty payment, sale invoices of imported goods, and proof of appropriate tax payment by the importer. The adjudicating authority had initially granted the refund in full after thorough scrutiny of these documents, indicating the validity of the appellant's claim.5. Ultimately, the High Court allowed the appeals filed by the appellant, setting aside the orders of the Tribunal and the Commissioner (Appeals). The Court found that the Tribunal and the first appellate authority's findings were not sustainable, as the adjudicating authority had already deemed the refund claim to be valid. The substantial questions of law were answered in favor of the appellant, leading to the closure of connected miscellaneous petitions.