Refund claims to trader-importer can’t be rejected even if failed to satisfy requirement under Notification: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that refund claims to trader-importers can’t be rejected even if failed to satisfy requirements under the notification.

M/s.ABB Limited, the appellant filed a refund claim in terms of Notification No.102/2007-Cus. dated 14.09.2007 as amended.  The refund claim was for a refund of 4% of Special Additional Duty (SAD) paid by them at the time of import of the goods. The sanctioning authority sanctioned part of the refund and rejected some amount observing that the appellant has not satisfied the requirement as stated in para 2 (b) of the notification. 

The appellant is a trader and has paid VAT while selling the imported goods. By inadvertent omission, they failed to make the endorsement as required under para 2(b) of the notification. In some of the commercial invoices, the appellant had handwritten that ‘credit is not admissible on SAD’ to comply with the requirement under para 2(b). The department has denied the refund on all the invoices which were handwritten as well as which did not bear the endorsement. 

In Chowgule& Company Pvt. Ltd. Vs CCE (supra), it was held that “A trader-importer, who paid SAD on the imported .good and who discharged VAT/ST liability on a subsequent sale, and who issued commercial invoices without indicating any details of the duty paid, would be entitled to the benefit of exemption under Notification 102/2007-Cus., even though he made no endorsement that “credit of duty is not admissible” on the commercial invoices, subject to the satisfaction of the other conditions stipulated therein.”

A Coram comprising of Ms SulekhaBeevi C.S., Member (Judicial) and Shri Vasa Seshagiri Rao, Member (Technical) observedthat the rejection of refund cannot be justified and held that the appellant is eligible for a refund. While allowing the appeal, the Coram set aside the impugned order.

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