CESTAT allows refund of 4% Special Additional Duty under Notification 102/2007-Cus despite multiple claims on single bill of entry

CESTAT Ahmedabad allowed the appeal, setting aside the department's order that denied refund of 4% Special Additional Duty under Notification No. 102/2007-Cus. The appellant had filed multiple refund claims against one bill of entry due to payment through two mediums - DEPB Script and cash. The tribunal held that procedural requirements should not defeat substantial benefits when all essential conditions are met. The department's application of procedural safeguards was deemed trivial given the circumstances, and the notification's intent was prioritized over executive circular application, entitling the appellant to the refund claim.

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Issues Involved:
1. Eligibility for refund of 4% Special Additional Duty (SAD) paid in cash.
2. Procedural compliance with Notification No.102/2007 - Customs and Customs Circular No. 06/2008 - Cus.

Summary:

Issue 1: Eligibility for Refund of 4% SAD Paid in Cash
The Appellant, M/s Hamilton Houseware Pvt. Ltd., engaged in importing goods and paying appropriate Countervailing Duties (CVD) and 4% Special Additional Duty (SAD), sought a refund of the 4% SAD paid in cash. The Department denied the claim on the grounds that two refund applications were filed for the same Bill of Entries within the same financial year, allegedly violating Notification No.102/2007 - Cus. The Appellant argued that they had fulfilled all conditions under the Notification and that the refund should not be considered erroneous as the first claim was granted post verification and the second was granted by Order in Original No. 45/14-15 dated 14.06.2014.

Issue 2: Procedural Compliance with Notification and Circular
The Department contended that the Appellant violated para 4.2 of Customs Circular No. 06/2008 - Cus, which stipulates that only a single claim against a particular Bill of Entry should be filed within one year. The Appellant filed two separate claims due to payments made through DEPB Script and Cash. The Tribunal observed that the procedural requirement should not override the substantial benefit of the refund. The intent of the Notification should take precedence over the procedural stipulations of the Circular.

Tribunal's Findings:
The Tribunal highlighted that the procedural conditions under the Circular are safeguards and should not negate the substantial benefit of the Notification. The Tribunal referenced several cases, including Mitutoyo South Asia Pvt. Ltd. v Commissioner of Customs, Ambey Sales v Commissioner of Customs, and Devki Nandan J Gupta v Commissioner of Customs, which supported the view that procedural lapses should not deny substantial benefits if all essential conditions are met.

Conclusion:
The Tribunal concluded that the benefits under Notification No.102/2007 - Customs should not be denied to the Appellant, and the Appellant is entitled to the refund claim. The impugned order was set aside, and the appeal was allowed.

Order:
The appeal is allowed, and the impugned order is set aside. The judgment was pronounced in the open court on 26.02.2024.

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