Refund claim should not be hanged for technical lapses.

PJ/Case Law/2013-14/2014

Case:-MARUTI SUZUKI INDIA LTD. Vs COMMISSIONER OF CUS. (IMPORT), MUMBAI

Citation:-2013 (296) E.L.T. 100 (Tri. - Mumbai)

Brief facts:-The appeal arises from Order-in-Appeal No. 26/MCH/AC/CRARS(IMP)/2012, dated 30-1-2012 passed by the Commissioner of Customs (Appeals), New Custom House, Mumbai -I.

The appellant, M/s. Maruti Suzuki India Ltd., had imported cars under six bills of entry during the period September, 2007 to January, 2008 and had cleared the same on payment of duty including the Special Additional Duty. These were subsequently sold by them and they filed a refund claim towards the refund of SAD in terms of Notification No. 102/2007 for an amount of Rs. 1,62,02,862/-. The refund claims were examined and a deficiency memo dated 31-10-2008 was issued calling for the following documents:

(a)    Certificate from C.A. who certifies Annual Financial Account under Companies Act co-relating with payment of ST/VAT on the imported goods with invoices of sale with original tax/duty payment document as proof of payment of ST/VAT.
(b)    Invoice
(c)    Packing list
(d)    Certificate from C.A. who certifies annual account of the importer that the burden of 4% SAD has not been passed on by the importer to buyer.
(e)    Sale Invoices with stamp to state that no CENNAT credit is admissible.
(f)     Balance sheet for relevant year with auditor report & Ledger copy
(g)    Self declaration that the evidence of 4% CVD has not been passed to any other person.
(h)    Document evidencing payment of ST/VAT (In original) duly issued by or acknowledged by the concerned ST/VAT authorities.

The appellant failed to submit these documents in spite of repeated reminders and accordingly, the Assistant Commissioner passed an order rejecting the refund claim for non-submission of documents as directed by him in the deficiency memo. He also held that in the invoices issued, there was no endorsement to the effect that the buyers were not entitled to take any CENVAT credit of the SAD paid on the impugned goods which was a statutory requirement under the aforesaid Notification. He also held that the appellant had not submitted any documents evidencing the fact that the claim was not hit by the bar of unjust enrichment.

Against the impugned order the appellant preferred an appeal before the lower appellate authority and submitted all the documents in support of their claim as pointed out in the deficiency memo. However, the appellate authority dismissed the appeal on the ground that the appellant had not submitted the required documents, there was no endorsement in the invoices issued regarding non-availability of CENVAT credit of the SAD by the buyers and also no evidence had been produced for crossing the bar of unjust enrichment.

Appellant’s contentions:-The learned counsel for the appellant submitted that they had submitted before the appellate authority all the documents mentioned in the deficiency memo. However, the appellate authority did not consider any of those documents and had dismissed the appeal. He also admitted that in the sales invoice issued to the customers, they had not indicated the SAD amount and, therefore, the question of the buyers taking any CENVAT credit would not arise at all. It was also argued that the dealer to whom the vehicles had been sold were not registered dealers for CENVAT credit purposes. It was his submission that, if given an opportunity, they would produce all the documents before the adjudicating authority for a fresh consideration of the refund claims in accordance with law. Accordingly, he pleaded for remanding the case back to the adjudicating authority.
Respondent’s contentions:-The learned Dy. Commissioner (AR) appearing for the Revenue reiterated the findings of the lower authorities that in the invoices issued, there was no endorsement to the effect that the buyers were not entitled to take any CENVAT credit of the SAD paid on the impugned goods which was a statutory requirement under the aforesaid Notification and that the appellant had not submitted any documents evidencing the fact that the claim was not hit by the bar of unjust enrichment.

Reasoning of judgment:-As regards the non-endorsement of non-availability of CENVAT credit of the SAD paid on the sales invoice, in the invoice issued by the appellant, there was no mention of SAD separately and therefore, the question of buyers taking any credit would not arise at all. In a similar case, where endorsement relating to SAD was not made on the sales invoices, in respect of sales through non-registered dealers, this Tribunal vide Order No. A/58/2013/CSTB/C-I, dated 6-12-2012 in the case of Novo Nordisk India Pvt. Ltd. v. Commissioner of Customs (ACC & Import), Mumbai [2013 (292)E.L.T.252 (Tri.-Mum.)]had held that substantive benefit of exemption Notification should not be denied on the ground of procedural or technical infraction, based on the decisions of this Tribunal in the case of Equinox Solution Ltd. v. Commissioner of Customs (Import), Mumbai - 2011 (272)E.L.T.310and Commissioner of Customs, Bangalore v. Kohler India Corporation Pvt. Ltd. - 2012-TIOL-182-CESTAT-BANG. In the present case also since the goods were cars, on which CENVAT was not available and the dealers through whom the goods were sold were also not dealers registered for CENVAT credit purposes, the question of the buyers availing any CENVAT credit would not arise at all. Therefore, non-endorsement of non-availability of SAD does not materially affect the refund claims.

As regards the non-submission of other documents including those relating to unjust enrichment, the appellant had produced before the lower appellate authority, their balance sheets indicating the amount involved in the refund applications as ‘recoverable’ from the Customs and also a CA certificate that the appellant had not passed on the burden of SAD on to the buyers. From these documents enough evidence exists with regard to the appellant’s claim that they had not passed on the incidence of SAD to buyers and, therefore, the question of unjust enrichment might not arise. Nevertheless, the appellant was directed to produce before the original adjudicating authority all the documents specified in the deficiency memo and, thereafter, the original adjudicating authority shall consider the refund application afresh and decide the eligibility of the appellant to the refund.

Decision:-Appeal was allowed by way of remand.

Comment:-The substance of this case is that if the goods are sold to customers who are not registered dealers for CENVAT credit purposes or the goods are such on which credit cannot be taken or the amount of SAD has not been separately shown in the invoices etc., the necessity for the assessee to comply with the procedural condition of specifying the “non-availability of cenvat credit” does not arise. Therefore, the refund claim should not be withheld as far as possible for technical infractions of law when the substantial conditions for availing the refund claim have been satisfied.

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PJ/Case Law/2013-14/2014

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