Cenvat Refunds cannot be Denied on Minor Procedural Grounds: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that cenvat refunds cannot be denied on minor procedural grounds. The refund was rejected stating that the wording of the endorsement made in the sales invoices was not strictly as per the Circular issued by the Board and that the sale invoices do not mention the name of the appellant on the invoice.

M/s. Petrotech Products India Pvt. Ltd, the appellant imported LDPE Processed Granules, Calcium Carbonate Powder etc. vide 7 bills of entry by paying 4% CVD and were selling the same through a consignment agent/stockist. They had filed refund applications of the CVD duty in terms of Notification No. 102/2007-Cus dated 14.9.2007 as amended. After examining the records, the original authority sanctioned the refund. The department preferred an appeal before

Commissioner of Customs (Appeals) who vide the order impugned herein allowed the appeal of the Revenue and set aside the order of the original authority who had sanctioned the refund on the ground that the declaration of endorsement/stamping made on the invoices is not as per the Circular issued by the Board. The appellate authority further held that the sale invoices do not mention the name of the appellant herein.

Shri S.Venkatachalam appeared for the appellant and  Smt. Anandalakshmi Ganeshram appeared for the Revenue.

The counsel for the appellant submitted that they have produced the required Chartered Accountant’s certificate and other corroborative evidence to prove payment of sales tax and VAT at the time of sale of goods. The only contention made in the impugned order rejecting the refund is about the wording of the endorsement made in the sales invoices which are not strictly as per the Circular issued by the Board and that the sale invoices do not mention the name of the appellant on the invoice.

He stated that the invoice does not contain the name of the importer as the sale invoice was issued by their consignment agent / stockiest and the facts are verifiable. The consignment sale agreement made between the selling agent and the importer has been submitted to the department along with the CA certificate. A procedural error should not be a reason to deny substantial relief.

It was observed that the refund claim is sought to be denied on technical grounds that the wording of the endorsement made in the sales invoice is not strictly as per the Circular issued by the Board and that the sale invoices do not mention the name of the appellant on the invoice.

As per Board Circular No. 16/2008-Cus dated 13.10.2008, it has been clarified that in case of sale of imported goods by importer through consignment agent/stockist, the refund of 4% CVD shall be granted by customs field formation subject to the condition that the consignment agent/stockist has been authorized to sell the imported goods in terms of the agreement entered into between the importer and consignment agent/stockist.

A single-member bench of Shri M. Ajit Kumar, Member (Technical) observed that there has been substantial compliance with the conditions by the appellant as apart from two issues all other conditions have been complied with. The minor non-compliance of procedure pointed out in the impugned order could otherwise have been verified with contemporary documents and physical enquiry should not have led to the denial of substantial benefit especially in this era of trade facilitation.

Further viewed that the appellant is eligible for a refund and it would be improper to deny the same on minor procedural grounds which are otherwise verifiable. The CESTAT set aside the impugned order and allowed the appeal.

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