Refund Rejection for CVD and ACD on Imports : CESTAT Allows Claim Citing Non-Passing of Duty Burden [Read Order]

The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) allows claim for refund of Countervailing Duty (CVD) and Additional Customs Duty(ACD) on imports, citing non-passing of duty burden and holding that denial based on a mere possibility of availing CENVAT credit is not sustainable.

EMM EII Wooltex,appellant-assessee,imported various textile articles and filed Bill of Entry No. 9635405 dated 10.05.2017 for an assessable value of Rs. 23,07,004/-. During examination, the department found discrepancies between the goods and the declaration. Based on the assessee’s request, the case was adjudicated with fines and penalties.

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The assessee later succeeded in appeal vide Order dated 01.10.2019. A refund claim was filed, and part of the amount was refunded. However, the original authority rejected a refund of Rs. 2,57,625/-, stating that CVD and ACD could be passed on or availed as CENVAT credit.

The assessee counsel submitted that the refund of CVD and ACD could not be denied on the ground that CENVAT credit might be availed later. He argued that the appellant-assessee was entitled to the refund of Rs. 2,57,625/-.

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The departmental representative supported the original order and stated that detailed reasons for rejecting part of the refund were given. He also pointed out that this issue was not raised earlier.

In response, the assessee counsel submitted that since it involved a question of law, it could be raised at any stage of the appeal.

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A single member bench of P.Anjani Kumar(Technical Member) heard both sides and examined the records. It noted that the original authority found no bar of unjust enrichment but still proposed recovery of differential amounts after reassessment of CVD and ACD.

The appellate tribunal observed that the original authority accepted the Chartered Accountant’s certificate confirming that the duty burden was not passed on, yet denied refund based on a mere possibility of credit being taken. It held that refund could not be denied on such apprehension and found that the rejection of part of the refund was not justified.

In short, the appeal was allowed.

To Read the full text of the Order CLICK HERE

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