Refund for 4% SAD on Imports Claimed After New Evidence Emerges: CESTAT Orders Verification Despite Initial Voluntary Withdrawal [Read Order]

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed verification of newly discovered evidence for a Rs. 1,57,818 refund claim of 4% SAD, despite its initial withdrawal during scrutiny.

Anand Tradelink Pvt. Ltd., the appellant, an importer of goods, filed a refund claim for 4% Special Additional Duty (SAD) paid on imported goods subsequently sold in the domestic market. The Customs Department objected to a portion of the refund of Rs. 1,57,818, citing mismatches in the descriptions between the imported goods and the sale invoices. The appellant had initially waived and withdrawn this part of the claim during scrutiny.

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The case arose when the Customs Department processed the refund claim, except for Rs.1,57,818, and the appellant filed an appeal with the Commissioner (Appeals) challenging the decision. The Commissioner (Appeals) rejected the appeal on the grounds that the appellant had voluntarily waived the claim.

The appellant argued before the CESTAT that they had obtained supporting documents proving that the goods sold were indeed part of the imported goods and that the claim for Rs. 1,57,818 was valid.

They requested the tribunal to reconsider the claim based on these documents and cited the principles of natural justice. The appellant also relied on the Supreme Court’s ruling in Dunlop India Ltd. vs. Union of India, 1983 (13) E.L.T. 1566 (SC) to support their argument.

The department’s counsel argued that the appellant had waived the claim, it no longer existed for further proceedings. They argued that reopening a voluntarily waived claim was not permissible.

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The single-member bench comprising Ramesh Nair (Judicial Member) reviewed the submissions and prior records. The tribunal observed that the appellant’s new evidence needed a fresh evaluation and that denying an opportunity to present this evidence would be contrary to the principles of natural justice.

The tribunal remanded the matter to the adjudicating authority directing it to reassess the refund claim of Rs. 1,57,818 based on the documents presented or to be presented by the appellant. The appellant’s appeal was allowed.

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