TaxTMI 
TaxTMI 
2026 (6) TMI 187
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....e of the imported goods in the domestic market on payment of VAT/CST, the appellant became eligible to claim refund of SAD in terms of the said notification. The refund claims so filed came to be rejected by the adjudicating authority and such rejection was upheld vide Order-in-Appeal No. C3/750/R/2013 dated 20.03.2014 passed by the Commissioner of Customs (Appeals), Chennai, which is the impugned order in the present proceedings. 1.2 The appellant filed twelve refund claims for the period 2009-2010 amounting to Rs.2,01,60,345/- along with supporting documents such as Bills of Entry, sales invoices, proof of VAT payment, and certificates as required under the notification. The claims were initially processed but came to be rejected by the original authority primarily on the ground that the authority lacked jurisdiction to sanction the refund. This issue of jurisdiction ultimately came to be decided by this Tribunal in Final Order No. 42418/2021 dated 22.10.2021 directing reconsideration of the claims on merits. 1.3 Subsequently, the proceedings were revived; however, during the interregnum, it is evident from the record that original documents earlier submitted by the appella....
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.... conditions. 4.1 Per contra, the Ld. Authorized Representative Shri Vineet Goyal for the Revenue reiterated the findings of the lower authorities and submitted that the conditions prescribed under Notification No. 102/2007 are mandatory and must be strictly complied with. It was contended that the appellant failed to produce original documents such as Bills of Entry and TR-6 challans and did not establish proper correlation between imported goods and goods sold. It is further submitted that the absence of endorsement on invoices to the effect that no credit of SAD has been passed on is fatal to the claim. 4.2 The Revenue also contended that refund being in the nature of exemption must be strictly construed and that the burden lies on the claimant to establish compliance with all conditions. Reliance was placed on decisions where refund claims were denied for non-production of primary documents and non-fulfillment of procedural requirements. 5. Upon consideration of the rival submissions made by the appellants and the Revenue and on perusal of the records, the core question that arises for determination is whether rejection of the refund claims under Notification No.102/200....
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..... The acknowledgment seals, inward diary numbers, file references, and receipt endorsements appearing on the applications conclusively demonstrate that the claims and supporting documents were duly received and taken on record by the department. The records further show that after remand by this Tribunal in Final Order No. 42418/2021 dated 22.10.2021 and consequent reorganization of Commissionerate's, the original files became untraceable within the department despite repeated correspondence between the Refunds Section and Air Cargo authorities. In such circumstances, the appellant reconstructed the claims on the basis of available copies, acknowledgements, scanned invoices, VAT records, indemnity bonds, and Chartered Accountant certificates. The department therefore cannot reject the claims on the ground of non-production of original documents when the records themselves establish that the originals had earlier been submitted and acknowledged by the department. 6.4 The central issue, however, concerns compliance with conditions stipulated in paragraph 2 of Notification No. 102/2007. The objections raised in the impugned order substantially relate to non-availability of certain ....
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....that no credit of SAD had been availed or passed on to buyers and the department has not produced any evidence to rebut the said certification or establish availment of double benefit by the purchasers. We further note that the appellant had also furnished indemnity bonds during the course of processing of the refund claims undertaking to safeguard the revenue in the event of any future discrepancy regarding the documents or refund entitlement. In such circumstances, mere absence or deficiency of endorsement in certain invoices cannot by itself lead to denial of the substantive refund benefit. 6.7 In the present case, the appellant has furnished copies of Bills of Entry, VAT records, and certification establishing compliance with conditions 2(a),2 (b), 2(d) and 2(e) of Notification 102/2007 -Cus. 6.8 The principal issue then is whether the conditions of Notification No. 102/2007-Cus have been complied with. The objection of the department is largely based on absence of endorsement on invoices, nonproduction of original TR-6 challans, and alleged lack of correlation. These objections must be tested in light of judicial precedents cited by the appellant. i. The Larger ....
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....y of certain original documents, some of which arose due to loss of records by the department itself. Therefore, the present case is one of substantial compliance and the ratio of Alnoori Tobacco Products cannot be invoked to deny the refund claim. 6.10 Turning to the CBEC Circulars, the appellant has relied upon Circular No. 6/2008-Cus dated 28.04.2008 and Circular No. 16/2008-Cus dated 13.10.2008, which clarify the procedure for SAD refund and emphasize that the purpose of the notification is to avoid double taxation. These Circulars do not mandate rigid compliance with procedural conditions but instead guide the officers to ensure that refund is granted where VAT has been paid and no credit is availed. Further, Circular No. 18/2010-Cusdated 8.10.2010 reiterates that refund claims must be processed expeditiously and should not be rejected on minor procedural grounds. The Circular reflects the consistent policy of the Board that SAD refund is a beneficial scheme and should be implemented in a facilitative manner. 6.11 We find that the objection raised by the department regarding the so-called "tax invoice-cumchallan" also does not advance the Revenue's case. From the records....
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....s., and the failure to accord due weight to the same renders the impugned order unsustainable. 6.13 It is also pertinent that Notification No. 102/2007 itself does not prescribe endorsement as a condition precedent but only as a procedural safeguard. Where the appellant has furnished declarations, Chartered Accountant certificates, and VAT payment proof, the absence of physical endorsement cannot be treated as fatal. On an overall appreciation of facts, it is clear that the appellant has established payment of SAD at the time of import, subsequent sale of goods on payment of VAT, furnishing of documentary evidence including reconstructed records, and non-availment of credit. The deficiencies pointed out by the department are either procedural or attributable to departmental lapses such as loss of records. The rejection of refund on such grounds is contrary to the consistent line of judicial decisions discussed above and binding CBEC Circulars. 6.14 We find that considerable uncertainty prevailed at the relevant time regarding the proper authority competent to process refund claims arising from SEZ transactions. However, the position subsequently stood clarified by CBEC Circul....