The Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) has held that Cenvat Credit was not available in the absence of a Declaration of Duty in the invoice issued to the buyer and remanded the matter to consider the Chartered Accountant’s certificate dated 06/06/2014 apart from the other documents already submitted by the Appellant at the time of filing the refund claim adjudication.
Anwitha Impex Pvt. Ltd, the appellant had filed a refund claim amounting to Rs.4,51,058/- being the amount paid against 4% Additional Duty of Customs for the import of “Water Treatment Machine and Pump With Spares” filed under various bills of entry. It was noticed by the department that the appellant had submitted computer-generated sales invoices wherein they had stamped and not computer-printed the mandatory declaration required under Condition 2(b) of Notification No. 102/2007-Cus.
Hence to ascertain the veracity of the claim, the sales invoice of one of the buyers viz. M/s. Windsor Cotton Mills P. Ltd. was called for and examined. It was observed that the goods supplied under the sales invoice to Windsor Cotton Mills P. Ltd. did not contain even the mandatory rubber stamp prescribed under condition 2(b) of the above Notification at the time of sale of the goods.
Further, the appellant has not submitted a detailed Chartered Accountant’s certificate explaining whether the burden of 4% SAD has been passed on by the importer or not. It is the case of the department that the Chartered Accountant’s certificate did not specifically mention that 4% SAD was not passed on to the consumer. The appellant also did not reply to the alleged deficiency memo issued by the department. Hence after due process of law, the refund sanctioning authority rejected the refund claim. In appeal, the Commissioner (Appeals) upheld the same.
Shri Hari Radhakrishnan, counsel appeared for the appellant and Shri Anoop Singh, Joint Commissioner (AR) appeared for the respondent-department.
It was submitted that when SAD is included in the invoice, an endorsement is needed to caution the customer against credit and without an endorsement on the invoice, the customer cannot use SAD CENVAT credit. The appellant’s invoice doesn’t indicate the payment of SAD which shows that they had not charged the buyer with Special Additional Customs Duty. Therefore, he submitted that printing or stamping the above text is superfluous and the absence of such text should not lead to the rejection of the refund claimed.
The respondent alleged that there are two deficiencies in the refund claim. Firstly, the invoices were computer generated and no stamping as required under Condition No. 2(b) of Notification No. 102/2007 dated 14.8.2007 was available in the sale invoices of the buyer. Secondly, the Chartered Accountant’s certificate certifying that 4% SAD was not passed on to the buyer was not submitted. These documents being crucial to avail the benefit of exemption Notification were missing. The department on a random check of the invoices with one of the buyer M/s. Windsor Cotton Mills Pvt. Ltd. found that the stamping was not found in the sale invoices and has come to the conclusion that the stamping done on the invoices submitted with the department for refund claim is an afterthought and proved the malafide intention of the appellant.
The Commissioner (Appeals) has held that non-submission of the Chartered Accountant’s certificate before the original authority is not a curable defect and has rejected the claim.
A single bench of Shri M. Ajit Kumar, Member (Technical) found that the Board vide instruction circular issued from F.No. 275/34/2006- CX.8A, dated 25-7-2008 has stated that Commissioner (Appeals) while deciding the appeals filed before him under Section under Section 128A of the Customs Act, 1962, shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. He can direct the production of any document, or the examination of any witness to enable him to dispose of the appeal. In the circumstances, it was not proper of him to have rejected the appeal without examining it on its merits and after issuing a proper speaking order.
The CESTAT remanded the matter back to the Original Authority to consider the Chartered Accountant’s certificate dated 06/06/2014 apart from the other documents already submitted by the Appellant at the time of filing the refund claim.
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