The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that minor discrepancies cannot be reason for recovery of customs refund when Chartered Accountant (CA) certify stock report.
Santosh Timber Trading Co. Limited challenged the order seeking to recover the refund already sanctioned to the appellant. The appeal has also been filed by Shri Naresh Aggarwal, Director of the appellant company against imposition of penalty. The appellant had imported timber log and paid SAD on the same. The appellant had cut and sawed the timber logs and thereafter sold the same. In terms of Notification 102/2007, the appellants were granted the refund of SAD. Subsequently revenue raised a Show Cause Notice seeking to recover the refund already sanctioned as erroneous refund on the ground that the item imported was timber logs whereas the item sold by the appellant was saw logs. There was also some allegations of mismatch of description and procedural violations of Notification 102/2007-Cus.
The Apex Court in the case of Variety Lumbers has been held that the refund cannot be denied even if the imported logs were cut and sawn before sale.
The issue non-endorsement of the declaration in terms of para 2(b) of Notification 102/2007-Cus dated 14.09.2007. The said para 2(b) requires the importer to mention on the invoices that no credit of additional duty of customs levied under sub section (5) of Section 3 of the Customs Tariff Act 1975 shall be admissible. Counsel has pointed out that they are not registered dealer or manufacturer and therefore, the question of taking credit on any invoices issued by them does not arise.
The Tribunal viewed that since the appellant is not a registered dealer, therefore the question of taking credit on the invoices issued by them does not arise.
The revenue argued issue of non-mention of Bills of Entry number on the invoice and mismatch of description and number of pieces on the invoices and bills of entry. In grounds of appeal it has been clearly indicated that stock requests duty certified by Chartered Accountant was produced at the time of filing refund.
A two member bench comprising Mr Raju, Member (Technical) and Mr Somesh Arora (Judicial) held that minor discrepancies cannot be the reason for recovery of refund when the appellant had submitted Chartered Accountant certified stock report. The Tribunal set aside the order and allowed the appeals.
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