Decided on June 16,2015

Commr. Of Cus. (Import), Jnch, Nhava Sheva Respondents


ANIL CHOUDHARY, J. - (1.)The appellant -assessee is in appeal aggrieved with the Order -in -Appeal No. 1298 (CRC II -B)/2014(JNCH)/IMP -1260, dated 11 -3 -2014 passed by the Commissioner of Customs (Appeals), Nhava Sheva by which the refund of SAD under the provisions of Notification No. 102/07 was rejected on the ground of unjust enrichment. The brief facts are that the appellant had imported consignment of certain goods by Bill of Entry dated 27 -10 -2011 consisting of 'VTRON BRAND' - Video Cube 80" + LED SOURCE + DVI CARD, VTRPM [EDESTA; STAND FOR C -SX803 CUBE, DIGICOM CONTROL MANAGER WORKSTATION etc. At the time of import, the appellant had deposited SAD of Rs. 10,29,782/ - vide TR -6 challan dated 28 -10 -2011 alongwith other duties. The appellant resold the goods to Western Railway vide Sale Invoice No. 6422504843, dated 31 -10 -2011. In the said invoice dated 31 -10 -2011, Sales Tax/VAT have been shown separately. Further the declaration to the effect 'in respect of the goods covered in these invoices, no credit of additional duty of customs levied'. The appellant filed claim for refund of SAD in terms of Notification No. 102/07 vide refund application dated 25 -4 -2013. The said claim was adjudicated vide Order -in -Original dated 25 -6 -2013 and the said claim was rejected on the ground of unjust enrichment, wherein it has been observed that the appellant had made declaration in the invoice that no additional duty of customs is levied and further that the appellant have produced VAT challan in support. Sales Tax/VAT has been paid to the State Government. Further, as per the certificate of the C.A., it is seen that the importer has paid the customs duty including SAD on the goods cleared under the Bill of Entry and further certifies that the total quantity of the imported goods have been sold and Sales Tax have also been paid. It is further observed that in the Sales Contract with the Western Railway, it reveals that the contract amount (sales price) including all taxes and freight. Accordingly, it was felt that the appellant had passed on the 4% pertaining to the SAD to the buyers and accordingly, the refund claim was rejected.
(2.)Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), who vide the impugned order agreed with the findings of the adjudicating authority and upheld the Order -in -Original. Being aggrieved, the appellant is in appeal before this Tribunal.
(3.)The learned Counsel for the appellant urges that no question of passing of SAD to the buyer arises. It is evident from the Sales Invoice that the SAD has not been shown separately. Further, as Western Railway is not an assessee under the Central Excise Act, they are not entitled for credit of SAD under the scheme of taxation. The learned Counsel further relies on the C.B.E. & C.'s Circular No. 6/2008, dated 28 -4 -2008, wherein the Board was concerned with regard to procedure for refund of 4% SAD under the provisions of Notification No. 102/07. Vide para 6 of the said Circular, the Board observed that purpose of granting exemption is to ensure that the importer pays 4% CVD (SAD) or the appropriate Sales Tax/VAT and not both. It is not the intention of the Government to allow the importer to recover the 4% CVD from the buyer as well as to claim refund of this amount from Customs. Hence, the principle of unjust enrichment needs to be examined in each case before sanction of refund under this notification. However, considering the voluminous transactions and the documents involved in the cycle, from import to sale, it was felt that it would be expedient to allow the importer to submit a certificate from the statutory auditor/Chartered Accountant who certifies the annual accounts of the importer to the effect that the burden of 4% CVD has not been passed on by the importer to the buyer and fulfills the requirement of unjust enrichment. Further, in the said Circular the Revenue authorities have been directed to accept certificate of the C.A. and in absence of such certification, the Revenue authorities are required to further investigate whether the importer assessee seeks refund/exemption on the basis of self declaration. Accordingly, the appellant prays for setting aside the impugned order and allow the consequential refund.

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