whether Refund of 4% SAD allowed when the certificate of Chartered Accountant is by onetime chartered accountant?

PJ/Case Law /2016-17/3369

Case:- COMMISSIONER OF CUSTOMS, PATNA Versus M.S. METALS

Citation:-2016 (342) E.L.T. 241 (Tri. - Kolkata)

Issue:- whether Refund of 4% SAD allowed when the certificate of Chartered Accountant is by onetime chartered accountant?

Brief facts:- This appeal was filed by the Revenue against Order-in-Appeal No. 80/PAT/Cus/Appeal/2011, dated 29-4-2011 passed by the Commissioner (Appeals) of Customs & Central Excise, Patna as first appellate authority. Under this Order-in-Appeal dated 29-4-2011 first appellate authority had dismissed the appeal filed by the Revenue before him. Shri S.K. Naskar, AC (AR) appearing on behalf of the Revenue argued that a refund claim of Rs. 4,34,759/- (Rupees four lakh thirty-four thousand seven hundred and fifty-nine only) was sanctioned by Deputy Commissioner, LCS, Jogbani to the respondent under Order-in-Original No. 01/Refund/ Jogbani/2010, dated 15-3-2010 under Notification No. 102/2007-Cus., dated 14-9-2007 against which Revenue filed appeal with Commissioner (Appeals), who vide Order-in-Appeal dated 29-4-2011 dismissed the appeal of the Revenue against which the present appeal has been filed by the Revenue. Ld.

Appellant’s Contention:- Authorised representative appearing on behalf contested that respondent herein produced a copy from Chartered Accountant, who was not a regular Chartered Accountant of the respondent. That as per Para 2(vii) of C.B.E. & C. Circular No. 16/2008-Cus., dated 13-10-2008, such a certificate should be from the regular Chartered Accountant of the respondent and not their new Chartered Accountant. That in the absence of proper Chartered Accountant certificate, conditions of Notification No. 102/2007-Cus. Dated 14-9-2007 was not fulfilled and refund claim was wrongly sanctioned by the adjudicating authority and upheld by the first appellate authority.

Respondent’s contention:- Shri Manmohan Gupta (Advocate) appearing on behalf of the respondent contested that exemption Notification No. 102/2007-Cus., dated 14-9-2007 does not prescribe whether the Chartered Accountant certificate should be from a regular Chartered Accountant or a new Chartered Accountant. It was the case of the respondent that new Chartered Accountant was not an independent Chartered Accountant, but a new Chartered Accountant appointed for the purposes of auditing their records. Ld. Advocate made the Bench go through the last para, on page 15 of the appeal papers, to emphasize that their earlier Chartered Accountant was residing in Delhi and sometimes resided abroad and was not able to give respondent enough time. Therefore respondent was compelled to appoint a new Chartered Accountant, who was partner of M/s. SARR & Associates, as their regular Chartered Accountant, who would certify their annual financial records. Hence adjudicating authority while sanctioning refund claim had examined all the documents justifying fulfilment of conditions under clause 2 of Notification No. 102/2007-Cus., dated 14-9-2007. It was the case of the respondent that refund was correctly sanctioned by the adjudicating authority and Revenue’s appeal had been correctly rejected by the first appellate authority.

Reasoning of judgment:- The issue involved in the present appeal was of refundof 4% SAD paid by the respondent at the time of import and subsequently refund claim was filed under Notification No. 102/2007-Cus., dated 14-9-2007. Adjudicating authority while sanctioning the refund claim found all the conditions of Notification No. 102/2007-Cus., dated 14-9-2007 as fulfilled. Commissioner (Appeals) had also held that the conditions specified in this notification are complied with by the respondent. Revenue filed this appeal only on the ground that as per Para 2(vii) of C.B.E. & C. Circular No. 16/2008-Cus., dated 13-10-2008, Chartered Accountant certificate should be provided from the regular Chartered Accountant of the claimant. It was observed from the relevant para of C.B.E. & C. Circular dated 13-10-2008 that the same does not use the words ‘regular Chartered Accountant’, but only clarifies that certificate given by any other independent Chartered Accountant would not be acceptable for the purpose of 4% SAD refunds. In the case of the respondent, the earlier Chartered Accountant was residing in Delhi and was also frequently going abroad and respondent was not in a position to get enough time from the earlier Chartered Accountant. Respondent accordingly appointed a new Chartered Accountant, who became regular Chartered Accountant and cannot be considered as a onetime independent Chartered Accountant giving a certificate. Under the circumstances it cannot be said that the new Chartered Accountant appointed by the respondent was a onetime independent Chartered Accountant. In view of the above Order-in-Appeal dated 29-4-2011 passed by the first appellate authority was upheld and the appeal filed by the Revenue was dismissed.

Decision:- Appeal dismissed.

Comment:- the essence of this case is that for claiming refund of SAD under exemption notification No. 102/2007-Cus., dated 14-9-2007 certificate of onetime chartered accountant is not valid as stated in Board circular dated 13-10-2008. But as in the case assessee their regular chartered accountant resided elsewhere therefore the new charted accountant, partner of regular chartered accountant, was appointed for certifying annual records and same had certified the refund. As the appointment was for certifying the annual records and not just for claiming refund therefore refund was correctly sanctioned.
Prepared by:- Monika Tak

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PJ/Case Law /2016-17/3369

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