2023 (11) TMI 917 - AT - Customs

Minor procedural deficiencies cannot deny CVD duty refund benefits under Notification 102/2007-Cus when endorsements clearly show compliance

CESTAT Chennai allowed the appeal for CVD duty refund under Notification No. 102/2007-Cus. The refund was initially rejected due to technical ... Refund of CVD under Notification No. 102/2007-Cus - sale of imported goods through consignment agent/stockist and authorization requirement - endorsement on commercial invoices as condition for refund - non-declaration of duty in commercial invoice as satisfaction of refund condition - substantial compliance versus procedural non-compliance - verification by reference to Bill of Entry and contemporaneous records - trade facilitationSale of imported goods through consignment agent/stockist and authorization requirement - endorsement on commercial invoices as condition for refund - substantial compliance versus procedural non-compliance - verification by reference to Bill of Entry and contemporaneous records - Entitlement to refund of 4% CVD where imported goods were sold through a consignment agent/stockist despite non strict wording of endorsements and invoices not bearing the importer's name - HELD THAT: - The Tribunal found that the refund claim had been denied by the appellate authority on technical grounds limited to the wording of endorsements and absence of the importer's name on the sale invoices. The record, however, showed an endorsement on the invoices referring to the relevant Bill of Entry and a Chartered Accountant's certificate and consignment sale agreement corroborating that the consignment agent/stocksist was authorised and sales tax/VAT had been paid on behalf of the importer. The Board's Circular clarifying refunds in consignment sale situations requires an agreement authorising the consignment agent and a CA certificate correlating VAT/Sales Tax with the CVD paid; those substantive conditions had been met. The Tribunal held that minor procedural non compliance in the exact wording of endorsements, which could have been verified from contemporaneous documents and the BE, should not defeat the substantive entitlement to refund, particularly in the interest of trade facilitation. The decision relies on the view that procedural formalities that do not undermine the object of the exemption should not result in denial of relief. [Paras 4]Set aside the impugned order insofar as it denied refund on the stated procedural grounds and allow the appeal directing consequential relief as per law.Non-declaration of duty in commercial invoice as satisfaction of refund condition - refund of CVD under Notification No. 102/2007-Cus - Whether non specification of duty in a commercial invoice satisfies the condition under Notification No. 102/2007 Cus for grant of refund of CVD - HELD THAT: - Relying on the Tribunal's Larger Bench reasoning in Chowgule & Company Pvt. Ltd. , the judgment explains that Rule 9 of the CENVAT Credit Rules requires specific particulars in invoices for taking credit; where a commercial invoice does not disclose duty particulars, the very absence of duty details negates any possibility of taking CENVAT credit. Thus, non declaration of duty in the invoice itself effectuates the object of the endorsement requirement under Notification No. 102/2007 Cus and is a procedural mode by which the condition for refund is satisfied. Applying that principle, the Tribunal concluded that the invoices' failure to specify duty did not permit credit to be taken and therefore could not be a ground to deny refund that otherwise meets the notification's substantive conditions. [Paras 5]Non declaration of the duty element in the commercial invoice satisfies the procedural purpose of the endorsement requirement under the Notification and supports grant of the refund.Final Conclusion: The Tribunal allowed the appeal, set aside the order denying the refund, and directed sanction of the refund with consequential reliefs, holding that substantive conditions for refund were fulfilled and that minor procedural non compliances in invoice endorsements-read together with BE details and CA certification-could not defeat the refund entitlement. Issues involved:The issues involved in this case are the denial of refund claim on technical grounds related to the endorsement made in the sales invoice and the absence of the appellant's name on the invoice.Refund Claim Issue:The appellant imported goods and filed refund applications for CVD duty. The original authority sanctioned the refund, but the Commissioner of Customs (Appeals) set it aside due to discrepancies in the endorsement on the invoices and the absence of the appellant's name. The appellant contended that they complied with the conditions by providing necessary evidence and endorsements on the invoices. The Tribunal noted that the endorsement indicated the goods were imported by the consignor, and all conditions except minor procedural ones were met. Referring to a Board Circular, it was clarified that the refund should be granted if the consignment agent is authorized and appropriate taxes are paid. The Tribunal emphasized that the non-declaration of duty in the invoice itself signifies no credit would be available, satisfying the conditions under the relevant Notification. Therefore, the Tribunal allowed the appeal and directed the refund to be sanctioned.Judgment Summary:The Appellate Tribunal CESTAT Chennai addressed the denial of a refund claim on technical grounds in a case involving the endorsement on sales invoices and the absence of the appellant's name. The appellant had imported goods and filed for a refund of CVD duty, which was initially sanctioned but later set aside by the Commissioner of Customs (Appeals). The Tribunal found that the appellant had substantially complied with the conditions for the refund, as per a Board Circular. It was noted that the non-declaration of duty in the invoice itself indicated no credit would be available, aligning with the conditions under the relevant Notification. Therefore, the Tribunal allowed the appeal and directed the refund to be sanctioned, emphasizing that minor procedural errors should not lead to the denial of substantial benefits.