TaxTMI 
TaxTMI 
2026 (6) TMI 191
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....itially produced by the appellant contained endorsement conveying that CENVAT credit was not allowable. 2. Briefly stated, the appellant filed three SAD refund claims aggregating to Rs.18,82,526/- under Notification No.102/2007-Cus. in respect of imports covered under 27 Bills of Entry. The claims were initially rejected on the ground that the sales invoices did not contain proper endorsement regarding non-admissibility of CENVAT credit. Though the matter was remanded by the Commissioner (Appeals) for verification, the original refund files were admittedly misplaced by the department during de novo proceedings and the appellant was directed to reconstruct the records. The claims were thereafter again rejected on the ground that certain reconstructed copies of invoices did not contain the prescribed endorsement, which rejection came to be upheld in the impugned order. 3. The Ld. Advocate Ms. S. Sridevi appeared on behalf of the Appellant and advanced detailed submissions in support of the Appeal and the Ld. Authorized Representative Shri Vineet Goyal appeared for the Revenue. 4. The Ld. counsel for the appellant submitted that the impugned order is unsustainable both on fac....
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.... provisions, CBEC Circulars and the judicial precedents cited by both sides. 9. Before adverting to the rival contentions, it would be appropriate to briefly note that Notification No.102/2007-Cus. dated 14.09.2007 was issued to neutralize the cascading effect of SAD levied under Section 3(5) of the Customs Tariff Act, 1975 where imported goods are subsequently sold on payment of VAT/Sales Tax. The notification permits refund subject to proof of payment of SAD, subsequent VAT/Sales Tax-paid sale and endorsement in the sales invoices regarding non-admissibility of credit. The CBEC Circulars governing the scheme also emphasized avoidance of double taxation, prevention of double benefit and expeditious processing of refund claims upon verification of VAT payment and co-relation of goods. 10. In the present case, the original adjudicating authority, vide Order-in-Original No.908/2009 dated 03.12.2009, rejected the refund claims substantially on two grounds, namely, that in respect of one Bill of Entry only photocopy of the TR-6 challan had been furnished and therefore the condition relating to proof of payment of duty under para 2(a) and para 2(e)(i) of Notification No.102/2007-C....
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....edly misplacing the original records. 13. The records clearly disclose that after remand by the Commissioner (Appeals), the original refund files could not be traced by the department, and the appellant was repeatedly directed to reconstruct the file by furnishing copies of invoices and other available documents. The appellant accordingly resubmitted office copies of invoices, VAT/ST documents, worksheets, balance sheet extracts, self-declaration and Chartered Accountant certificate pursuant to departmental directions. The records further disclose that the appellant reconstructed the file based upon available office/quadruplicate copies and proportionately foregone refund wherever endorsement was unavailable. 14. We also find considerable merit in the appellant's contention that the entire rejection ultimately rests only upon absence of endorsement in certain office copies relating to a limited number of invoices. Significantly, the appellant itself voluntarily disclosed that omission had occurred in respect of certain office copies and expressly agreed that the refund amount relatable thereto could be proportionately reduced. Such conduct, in our considered view, establishes....
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....at no credit would be admissible to the purchaser is a requirement to be fulfilled for non passing of the credit to the said duty mentioned. If the appellants have not even mentioned SAD on the invoices, the purchasers is not in a position to avail the credit of the same, this purpose of notification is fulfilled.........." Similar views have also been taken in Nova Nordisk India Pvt. Ltd. v. Commissioner of Customs reported in 2013 (292) ELT 252 (Tri.-Mumbai) and Tomlukes India Pvt. Ltd. v. Commissioner of Customs reported in 2016 (335) ELT 624 (Tri.-Bang.). We find that there is a wealth of jurisprudence consistently taking the view that procedural defects relating to endorsement in invoices cannot defeat substantive SAD refund entitlement where payment of duty and subsequent VAT-paid sales stand established. We therefore do not wish to burden this order with further multiplication of precedents merely for the sake of prolixity. 18. From the consistent line of decisions discussed above, it is evident that the issue regarding denial of SAD refund on the ground of absence, variation or improper wording of endorsement in invoices under Notification No.102/2007-Cus. is no lo....
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....e departmental handling of the refund claims and the admitted misplacement of the original refund files. The records disclose that the Ombudsman directed initiation of appropriate disciplinary proceedings in relation to the loss/misplacement of the refund records. This circumstance assumes considerable significance because the very evidentiary difficulties now sought to be raised against the appellant arose only due to the department's own failure in preserving the original records. In such circumstances, adverse consequences flowing from missing files or reconstructed documents cannot fairly be visited upon the appellant. 22. In view of the above findings, we are unable to sustain the impugned order, which proceed largely on presumptions arising from reconstructed office copies despite admitted loss of original records by the department itself. The appellant had substantially complied with Notification No.102/2007-Cus. and is therefore entitled to the SAD refunds claimed. 23. As regards interest, we note that the appellant had also raised grievance regarding prolonged delay in sanction of refund before the Ombudsman proceedings. We find from the Bills of Entry and TR-6 chall....