2022 (6) TMI 1091 - AT - Customs

Successful appeal upholds refund order for Special Additional Duty (SAD) emphasizing legal provisions & documentary proof

M/s Technova Imaging Systems Pvt. Ltd. Versus Commissioner of Customs, ACC Mumbai

M/s Technova Imaging Systems Pvt. Ltd. Versus Commissioner of Customs, ACC Mumbai - TMI Issues:Refusal of SAD refund to the importer by the Refund Sanctioning Authority with concurrence of the Commissioner (Appeals) in the second round of litigation.Analysis:In this case, the Appellant-importer filed a refund application for SAD @4% against 28 Bills of entry, out of which refund was sanctioned against 22 Bills but rejected for 6 Bills due to alleged discrepancies with sale invoices. The Commissioner (Appeals) had earlier found in favor of the Appellant, directing them to produce necessary documents for refund substantiation. However, the Appellant was unsuccessful in subsequent proceedings before the adjudicating authority and the Commissioner of Customs, leading to the current appeal.The Commissioner (Appeals) had previously highlighted that the imported and sold goods, despite different brand names, were essentially the same, as evidenced by item codes and descriptions. The Commissioner emphasized that denying the exemption based on procedural technicalities would defeat the purpose of the exemption notification. The Appellant was instructed to provide the necessary documents for refund verification.The adjudicating authority, in the subsequent round of proceedings, exceeded its jurisdiction by delving into matters beyond the scope of verifying documentary proof of import and sale for SAD refund eligibility. The authority's focus on CENVAT credit and eligibility requirements not specified in Notification No. 102/2007 was deemed inappropriate. The authority's insistence on goods being sold in the same condition for exemption was found to lack legal basis in the notification itself.Refund of SAD is primarily governed by Notification No. 102/2007 and related circulars. The adjudicating authority's review post the Commissioner's favorable finding was deemed beyond its scope, as only the appellate authority can exercise such powers. The certificates correlating imported goods with sold goods, as per Circular No. 06/2008-Cus., were presented to both authorities, meeting the requirements for SAD refund proof.The judgment cited a judicial precedent from the Madras High Court, emphasizing the importance of accepting the consistency between import documents and sale invoices, as certified by a Statutory Auditor. In line with this precedent, the appeal was allowed, setting aside the Commissioner's order and directing the Department to refund the amount with applicable interest within two months.In conclusion, the Appellant's appeal was successful, with the order for SAD refund being upheld, emphasizing the importance of adhering to legal provisions and documentary proof requirements for such refunds.