M/s.Groz Beckert Asia Pvt. Ltd., vs Commissioner Of Customs (Air Cargo)

Brief facts are that the appellants filed refund claim for Rs.50,175/- being the refund of SAD in terms of Notification No.102/2007-Cus., dated 14.09.2007 as amended by NotificationNo.93/2008, dated 01.08.2008. The adjudicating authority rejected the refund stating that the appellants have not complied with the conditions as per 2(b) of the said Notification. Against that order, the appellant filed appeal before Commissioner (Appeals), who upheld the rejection of refund. Hence this appeal.

On behalf of the appellant, the learned counsel Shri Sudeep Singh appeared and argued the matter. He submitted that the appellant had paid VAT on the goods which was sold after import. This fact is not disputed by department. However, while filing the refund claim, the appellant had furnished copies of invoices which they obtained from their computer system. As such, the invoices did not bear the endorsement "Cenvat Credit is not available on the SAD". In fact, the appellant had issued invoices bearing the above endorsement to the buyers of the goods. The mistake came to light when pointed out by the adjudicating authority and the appellant immediately furnished copies of the invoices as given to the buyers. A statement also was given explaining the mistake on their part. However, the adjudicating authority rejected the refund claim on the ground that condition per 2 (b) of the Notification is not fulfilled. The Commissioner (Appeals) also took the very same view even though he has recorded that the appellant has later furnished proper documents. He relied upon the case in Larger Bench decision in M/s. Chowgule & Company Pvt. Ltd. Vs Commissioner of Customs & Central Excise reported in 2014 (306) E.L.T.326 (Tri.-LB) to argue that even if the said endorsements is not available on the invoices and the appellant has paid VAT on the goods, the refund cannot be rejected. The Final Order in the case of M/s. STP Ltd., Vs Commissioner of Customs (Sea), Chennai-IV reported in 2019 (370) E.L.T.672 (Tri.-Chennai) was also referred by the appellant. He prayed that the appeal may be allowed.

Learned Authorised Representative Shri M. Jagan Babu supported the findings in the impugned order.

The issue is whether the rejection of refund for the reason that the appellant has not fulfilled the condition in 2(b) of the Notification is justified or not. On perusal of the records, it is seen that the appellant has later produced necessary documents bearing the endorsement as required under condition 2(b) of the Notification. The department does not dispute that the appellant has paid VAT on the imported goods while selling the same. So also, there is no inquiry or investigation made on their part as to whether purchasers have availed Cenvat credit on the SAD included in the invoices. The facts establish that the invoices issued to buyers bear the endorsement. Be that as it may, in the case of M/s. Chowgule, the Larger Bench has held that even though the invoices do not bear the endorsement as under 2(b), if the VAT has been discharged on the imported goods, the assessee would be eligible for refund. After appreciating the facts and also following the above decision, I am of the view that the rejection of refund is unjustified. The impugned order is set aside. The appeal is allowed with consequential reliefs, if any.

(Dictated and pronounced in open court)