CESTAT Rejects Appeal by Assessee over Refund of Additional Duty: Cites Missing Mandatory Documents and Lack of Diligence [Read Order]

The dispute arose from a refund claim filed by the appellant under Notification No. 102/2007-Cus, regarding the additional customs duty paid on imports of Panasonic products. The refund was rejected by the original adjudicating authority on the grounds of non-submission of essential documents, including VAT/Sales Tax returns, Chartered Accountant certificates, sales invoices with CENVAT declarations, and other compliance proofs.

The Commissioner (Appeals) upheld the rejection, prompting the appellant to appeal to the CESTAT. Alongside the main appeal, the appellant also submitted a miscellaneous application seeking to introduce additional evidence, purportedly including the missing documents.

In a detailed analysis of both procedural lapses and the legal framework, the Tribunal noted that, despite a Deficiency Memo and multiple personal hearing opportunities, the appellant neither submitted the requisite documents nor appeared before the authorities. The appellant contended that the documents had already been submitted at an earlier date. However, the Tribunal found this claim unsustainable, observing that the date itself preceded the lodging of the refund claim.

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The Tribunal emphasised that, as per Circular 16/2008-Cus, dated 13.10.2008, the submission of specific documents, such as VAT challans, sales invoices, and Chartered Accountant certifications, was not a mere procedural formality but a mandatory requirement to establish entitlement under the exemption notification. The tribunal further observed that while an indemnity bond may be acceptable in cases involving minor procedural gaps, it cannot substitute for the core documentary compliance required for refund eligibility. It added that permitting such a substitution would risk misuse and lead to leakage in government revenue.

The Tribunal rejected the appellant’s plea to submit additional documents at the appellate stage, stating that no compelling cause was shown. It highlighted the principles under Rule 23 of the CESTAT Procedure Rules, 1982, which disallow parties from producing fresh evidence in an appeal unless under exceptional circumstances. The appellant, it held, had every opportunity at the original stage to furnish the documents and failed to do so. Further, the Tribunal expressed concern that the documents now offered were neither authenticated nor supported by any credible explanation regarding their non-submission earlier. Citing precedents, the Bench observed that appellate proceedings are not meant to fill gaps in weak cases or remedy negligence.

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The appellant had argued that the non-grant of the refund amounted to a violation of Article 265 of the Constitution, which prohibits taxation without authority of law. Rejecting this argument, the Tribunal stated that the SAD was lawfully collected under the Customs Act, 1962, and the refund conditions under Notification No. 102/2007-Cus were clear and binding.

The Bench comprising M. Ajit Kumar (Technical Member) dismissed the appeal and the application for additional evidence, holding the rejection of the refund to be valid and justified.M/s. Amicus Communications vs Commissioner of Customs

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The Tribunal asserted that this was not a case of tax being collected without legal authority, but rather a case of a refund being denied due to failure to comply with the conditions necessary for availing of that benefit.