2019 (12) TMI 655 - AT - Customs

Tribunal Overturns Rejection of Refund Claims, Highlights Importance of Trade Practices and Local Terminology.

The Tribunal overturned the rejection of refund claims under Notification No.102/2007-Cus., allowing the appeals with consequential benefits. The Tribunal ... Refund of SAD - N/N. 102/2007-Cus. dt. 14.09.2007 - rejection on the ground that invoices do not bear endorsement as required under condition 2(b) of notification No.102/2007, that the wordings used in the endorsement by the appellant does not correlate with the wordings of the endorsement as required under condition 2(b) of the notification, the Chartered Accountant certificate was not accepted by the authorities below alleging that it is factually incorrect and that the description of the goods in the Bills of Entry and the sale invoices do not match. Rejection on the ground that invoices do not bear endorsement as required under condition 2(b) of notification No.102/2007, that the wordings used in the endorsement by the appellant does not correlate with the wordings of the endorsement as required under condition 2(b) of the notification - HELD THAT:- The appellant has issued commercial invoices for sale of the goods. In Chowgule & Company [2014 (8) TMI 214 - CESTAT MUMBAI (LB)] the very same issue was analysed by the Larger Bench of the Tribunal which held that A trader-importer, who paid SAD on the imported goods and who discharged VAT/ST liability on subsequent sale, and who issued commercial invoices without indicating any details of the duty paid, would be entitled to the benefit of exemption under Notification 102/2007-Cus, notwithstanding the fact that he made no endorsement that 'credit of duty is not admissible' on the commercial invoices, subject to the satisfaction of the other conditions stipulated therein. - non-fulfilment of condition 2(b) cannot be a ground for rejecting the refund - rejection of refund set aside. Rejection of refund is that the Chartered Accountant certificate is flawed or incorrect and therefore not acceptable in evidence - HELD THAT:- There is no allegation raised by the department that these figures do not correlate. The only allegation with respect to Chartered Accountant certificate is that since he has stated that the sale invoices bear endorsement the same cannot be accepted - since condition 2 (e) to produce Chartered Accountant certificate so as to correlate VAT and SAD paid has been furnished by the appellant, the rejection of refund claim on this count against the assessee requires to be set aside. Mismatch of the description of the goods in sales invoices and the Bills of Entry - HELD THAT:- On perusal of description of the goods mentioned above, it is found that character of the goods (paper) has been shown in the sales invoices. So also, the goods sold are paper of different grades. The appellant has pointed out that he has used description of the goods as known in the trade in India. Department does not have a case that the description shown in the invoices are not the goods known in the local market in India. Thus, there are no major discrepancy in the description of the goods in the Bill of Entry and the sale invoices. The Tribunal in the case of Hanuman Timber Co. Vs CC (Port-Export) Chennai [2017 (7) TMI 749 - CESTAT HYDERABAD] relied upon by Ld.A.R had rejected the refund holding that there is no major mismatch of the goods. In the said case, the import was of timber logs and whereas in the sale invoices the goods were described as “face veneer”. The goods are entirely different and therefore it is not the case of minor mismatch for which reason the Tribunal has rejected the refund. The impugned order rejecting the refund claim is set aside - Appeal allowed - decided in favor of appellant. Issues involved:Refund claim rejection under Notification No.102/2007-Cus., Chartered Accountant certificate validity, Description mismatch in Bills of Entry and sales invoices.Analysis:1. Refund Claim Rejection: The appellants filed refund claims under Notification No.102/2007-Cus. for SAD paid on imported goods. The rejection was based on various grounds, including non-compliance with endorsement requirements and mismatch in descriptions. The appellant argued that as an importer-trader, fulfilling para 2(b) endorsement is not mandatory, citing the Chowgule & Company Pvt. Ltd. case. The Tribunal agreed, setting aside the rejection based on this ground.2. Chartered Accountant Certificate: The rejection on the basis of the Chartered Accountant certificate being factually incorrect was challenged. The appellant argued that the certificate fulfilled the requirement of correlating VAT and SAD paid, as per para 2(e) of the notification. The Tribunal found the rejection on this ground unjustified and set it aside.3. Description Mismatch: The rejection due to discrepancies in the description of goods in Bills of Entry and sales invoices was contested. The appellant argued that minor variations did not warrant rejection, citing precedents and stating that the goods' character was clear. The Tribunal agreed, emphasizing that the descriptions aligned with the goods' nature and local trade terminology, setting aside the rejection based on this ground.In conclusion, the Tribunal set aside the impugned order rejecting the refund claims, allowing the appeals with consequential benefits, if any, as per law. The judgment highlighted the importance of fulfilling specific conditions under the notification while also considering the practicalities of trade practices and local market terminology in assessing refund claims.