CESTAT quashes Rejection of Refund claim of SAD on Import of Shoes on ground of Non-inclusion of Allegation in SCN [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the rejection of the refund claim of Special Additional Duty (SAD) on the import of shoes on the ground of non-inclusion of allegation in the show cause notice (SCN). 

Katyal Metal Agencies, the appellant assessee was an importer and imported shoes and at the time of importation, the assessee paid the appropriate duty after importation, the assessee filed various refund claims under Notification No.102/2007 for refund of SAD paid at the time of importation. 

The assessee appealed against the order passed by the Commissioner (Appeals) for rejecting the refund claim of SAD filed by the assessee. 

N.K.Sharma and G.C. Saini, the counsels for the assessee contended that the show cause notice was issued to the assessee alleging that as the assessee had not paid Sales Tax/VAT, therefore, they are not entitled to refund the claim of SAD and was not alleged in the show cause notice that the refund claims filed by the assessee are time-barred. Therefore, the adjudicating authority cannot go beyond the allegation in the show cause notice in subsequent proceedings. 

S.Debnath, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee filed the refund claim beyond the period of limitation and the rejection of the refund claim was as per the law and liable to be sustained. 

The Bench observed that the rejection of the refund claim was not sustainable in the eyes of the law as the same had not been alleged in the show cause notice when it was issued after filing the refund applications by the assessee. 

The two-member bench comprising Ashok Jindal (Judicial) and Rajeev Tandon (Technical) held that the refund claim could not be rejected as time-barred as there was no allegation in the show cause notice and quashed the rejection of the refund claim while allowing the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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