In the recent ruling,the Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) affirmed that traders are entitled to exemption under Notification No. 102/2007-Cus for Special Additional Duty ( SAD ) payments, even without the required endorsement on invoices.
Avon Cycles Ltd.,the appellant-assessee,sought a refund of Special Additional Duty amounting to ₹43,798 after importing bicycles under Bills of Entry dated 27.06.2011 and 18.08.2011. Following the sale of the goods and payment of sales tax, the appellant submitted a refund application along with a certificate from the consignee’s Chartered Accountant, confirming that no CENVAT credit was taken as they did not hold Central Excise registration.
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However, the application was rejected due to the appellant’s failure to affix the proper endorsement in the original sales invoices, as required by Paragraph 2(b) of Notification No. 102/2007-Cus. The Commissioner (Appeals) upheld the rejection, leading to the current appeal.
During the appeal hearing, the appellant’s counsel stated that sufficient documents had been submitted to support the refund claim. The counsel cited the Larger Bench decision in M/s Chowgule & Company Pvt Ltd vs CCC & C.Ex (2014 (306) E.L.T 326 (Tri. L.B), which affirmed that traders paying Special Additional Duty (SAD) and discharging VAT/Sales Tax were eligible for exemption under Notification No. 102/2007-Cus, even without the endorsement “credit of duty is not admissible” on invoices, as long as other conditions were met.
The counsel also referenced relevant Tribunal decisions, including M/s Equinox Solution Ltd vs Commissioner of Customs (Import), Mumbai (2011 (272) E.L.T 310 (T).
The Authorized Representative (AR) for the Revenue reaffirmed the findings and indicated that the appellant was not eligible to claim SAD for failing to meet the notification conditions.
The two member bench comprising P.A.Augustian(Judicial Member) and Pullela Nageswara Rao (Technical Member) noted no dispute over the refund application, which included a certificate from the consignee’s Chartered Accountant confirming no CENVAT credit was taken on the Special Additional Duty (SAD) paid, as the issue was addressed by the Larger Bench in M/s Chowgule & Company Pvt. Ltd. (Supra).
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In conclusion the appeal was allowed with consequential relief.
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