2025 (12) TMI 902 - AT - Customs

Refund of 4% ADD allowed on CA-certified VAT proof, but time-barred claims fail under Notifications 102/2007, 93/2008

CESTAT partly allowed the appeal concerning refund of 4% Additional Duty of Customs on imported construction materials. It held that the appellant had ... Refund of 4% Additional Duty of Customs paid on import of construction materials - fulfilment of condition in para 2(e)(iii) of the Notification No. 102/2007-Customs dated 14.09.2007 read with Circular No. 16/2008 dated 13.10.2008 or not - rejection of the Chartered Accountant Certificate on the ground that the same is not in proper format as per PN 39/2011 dated 14.06.2011 - time barred claim or not. Non-fulfillment of the condition in para 2(e)(iii) of the Notification No. 102/2007-Customs dated 14.09.2007 read with Para 2(v), (vi) and (vii) of Circular No. 16/2008 dated 13.10.2008 - HELD THAT:- A plain reading of para 2(e)(iii) of the Notification No. 102/2007-Customs dated 14.09.2007 with para 2(vi) of Circular No. 16/2008 dated 13.10.2008 shows that once the Appellant produced copies of documents evidencing payment of VAT / CST (as effective discharge of VAT / CST payment on imported goods), the Chartered Accountant Certificate should have been considered as a document evidencing payment of appropriate sales tax / value added tax. The LAA has not rejected the submission of the Appellant that they have produced copies of documents evidencing payment of VAT / CST (as effective discharge of VAT / CST payment on imported goods). Therefore, the Appellant should be considered to have fulfilled the condition in para 2(e)(iii) of the Notification No. 102/2007-Customs dated 14.09.2007 read with Circular No. 16/2008 dated 13.10.2008. Rejection of appeal of the Appellant on the ground that the Chartered Account Certificate submitted by the Appellant is not in proper format as per PN 39/2011 dated 14.06.2011 - HELD THAT:- The format of Chartered Accountant Certificate as per Public Notice No. 39/2011 dated 14.06.2011 is only suggested / indicative format and not a mandatory format prescribed for claiming refund under notification No. 102/2007-Customs. Even the notification No. 102/2007-Cus dated 14.09.2007 does not prescribe any format for Chartered Accountant Certificate. Hence, rejection of the Chartered Accountant Certificate by the adjudicating authority as well as the LAA on the ground that the same is not in proper format as per PN 39/2011 dated 14.06.2011 is not correct. Time barred refund claim or not - HELD THAT:- In terms of the amendment made to notification No. 102/2007-Cus vide notification No. Notification No. 93/2008 dated 01.08.2008, the Appellant is required to file the claim for refund of 4% additional duty of customs before the expiry of one year from the date of payment of the said additional duty of customs. Therefore, the refund claim of Appellant in respect of four bills of entry No. 4304505 / 09.08.2011, 4441958 / 24.08.2011, 4727568 / 23.09.2011 and 4460717 / 25.08.2011 is time-barred as the refund claim in these cases has been filed beyond the period of one year from the date of payment of additional duty of customs. The appeal is partly allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether submission of copies of documents evidencing payment of VAT/CST, along with a Chartered Accountant's certificate based on verification of supporting records, satisfies the condition in para 2(e)(iii) of Notification No. 102/2007-Customs read with Circular No. 16/2008-Customs. 1.2 Whether a refund claim under Notification No. 102/2007-Customs can be rejected solely on the ground that the Chartered Accountant's certificate is not in the 'proper format' suggested in Public Notice No. 39/2011. 1.3 Whether the portion of the refund claim relatable to four specified Bills of Entry is barred by limitation under Notification No. 102/2007-Customs as amended by Notification No. 93/2008-Customs. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Compliance with para 2(e)(iii) of Notification No. 102/2007-Customs read with Circular No. 16/2008-Customs Legal framework 2.1 Para 2(e)(iii) of Notification No. 102/2007-Customs requires the importer to provide 'documents evidencing payment of appropriate sales tax or value added tax' on sale of the imported goods along with the refund claim. 2.2 Para 2(vi) of Circular No. 16/2008-Customs permits importers, in lieu of original ST/VAT challans, to submit copies of ST/VAT challans or other ST/VAT payment documents, 'along with a certificate from the Chartered Accountant...confirming the payment against the aforesaid documents', and declares that such combination would be sufficient to fulfill the requirement of para 2(e)(iii) of the Notification. Interpretation and reasoning 2.3 The Tribunal noted that the appellant produced copies of documents evidencing payment of VAT/CST as effective discharge of VAT/CST on the imported goods, and a Chartered Accountant's certificate based on verification of Bills of Entry, TR-6 challans, sale invoices, VAT/CST challans/returns, payment details and sales registers. 2.4 It was observed that the lower appellate authority did not dispute the appellant's assertion that such VAT/CST payment documents had been produced. 2.5 On a 'plain reading' of para 2(e)(iii) of the Notification with para 2(vi) of the Circular, the Tribunal held that once copies of VAT/CST payment documents are produced, accompanied by a Chartered Accountant's certificate confirming such payment, the requirement of 'documents evidencing payment' of appropriate VAT/CST stands fulfilled. Conclusions 2.6 The condition under para 2(e)(iii) of Notification No. 102/2007-Customs, read with para 2(vi) of Circular No. 16/2008-Customs, was held to be satisfied by the appellant through submission of VAT/CST payment documents and the Chartered Accountant's certificate. Issue 2 - Validity of rejection based on non-use of 'proper format' for Chartered Accountant's certificate Legal framework 2.7 Public Notice No. 39/2011 (Sea Port - Exports) states in its enclosure that the formats for CA certification/self-declaration in Annexures I-V are 'Suggested / Indicative formats'. 2.8 Notification No. 102/2007-Customs does not prescribe any specific format for the Chartered Accountant's certificate. Interpretation and reasoning 2.9 The lower authorities rejected the refund claim holding that the CA certificate was not in the 'proper format' as per Public Notice No. 39/2011. 2.10 The Tribunal inferred from the wording 'Suggested / Indicative formats' in the Public Notice that those formats are not mandatory, but only guidance for presentation. 2.11 Since neither the Notification nor the Circular prescribes a mandatory format, and the Public Notice itself treats the annexed formats as indicative, the Tribunal held that substantive compliance through a CA certificate containing the requisite confirmations cannot be denied merely for deviation from the suggested format. Conclusions 2.12 Rejection of the Chartered Accountant's certificate, and consequently the refund claim, solely on the ground that the certificate was not in the format suggested in Public Notice No. 39/2011 was held to be incorrect and unsustainable in law. Issue 3 - Limitation for filing refund claim on four Bills of Entry Legal framework 2.13 By virtue of Notification No. 93/2008-Customs amending Notification No. 102/2007-Customs, the claim for refund of 4% Additional Duty of Customs must be filed 'before the expiry of one year from the date of payment of the said additional duty of customs'. Interpretation and reasoning 2.14 The Tribunal examined the dates of payment of additional duty as per the TR-6 challans and the common date of filing the refund claim (28.09.2012) for four specific Bills of Entry. 2.15 It found that in each of these four cases, the claim was filed beyond one year from the respective dates of payment of additional duty as reflected in the TR-6 challans. Conclusions 2.16 The refund claims pertaining to Bills of Entry Nos. 4304505/08.08.2011, 4441958/24.08.2011, 4727568/23.09.2011 and 4460717/25.08.2011 were held to be time-barred and not admissible. 2.17 The appeal was consequently allowed in part: the impugned order was set aside in respect of the seven timely claims, granting consequential relief, and upheld in respect of the four time-barred claims.