The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that regular cash inflows are the lifeline of a business and blocking legitimate tax refund claims on half-baked reasons does a great dis-service and should be avoided.
The bench of M. Ajit Kumar (Technical Member) has observed that minor discrepancies of description mentioned in the invoice vis-à-vis the Bill of entry do not go to the root of the validity of the refund claim and are curable. There is no allegation that the Value Added Tax (VAT)/CST were not paid at the effective rate. The CA’s Certificate along with the reconciliation statement has been prescribed in Boards Circular to provide a ledger/ document-based scrutiny of the claim and should ordinarily be relied upon to sanction the claim.
The appellant/assessee filed refund claim for refund of 4% SAD levied under Sec. 3(5) of Customs Tariff Act, 1975 for their import of ‘Prime Quality Pre-printed Galvanized Steel Coils (Color Light Blue)’ in terms of Notification No. 102/2007 dated 14.9.,2007 as amended along with relevant documents. The appellant submitted all relevant documents as proof that the necessary duties including 4% SAD was paid and that the goods were cleared for home consumption.
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The assessee submitted sales invoices and VAT / CST paid challans / VAT / CST returns as proof that the goods imported were sold and that necessary VAT / CST were paid on such sale. The appellant also produced Chartered Accountant’s certificate and reconciliation statement in support of their claim. After due process of law, the lower authority rejected the refund claims on the ground that there is discrepancy in description of the goods imported and goods sold. In appeal, Commissioner (Appeals) rejected the appeal and upheld the Order in Original.
The appellant contended that the appellant has filed refund application for refund of 4% additional duty amounting to Rs.5,64,430.30 paid for the import of ‘Prime Quality Pre- printed Galvanized Steel Coils (Color Light Blue)’ and submitted all the relevant documents. The refund was rejected on the ground of discrepancy in description of the goods imported and goods sold.
The tribunal allowed the appeal and held that if a serious evasion of duty was suspected physical inquiry could have been conducted by revenue with the buyers or in any other manner and the CA’s Certificate along with reconciliation statement discredited, while taking action to deny the claims. There would then be proper ground to reject the claim and take any other action deemed necessary. Regular cash inflows are the lifeline of a business and blocking legitimate claims on half-baked reasons does a great dis-service and should be avoided.
The tribunal held that ordering the rejection of the refund claim is not proper and hence liable to be quashed and set aside.
Case Details
Case Title: Abhayispat (India) Pvt. Ltd. Versus Customs Commissioner
Citation: Customs Appeal No.40695 of 2015
Decision date: 27.08.2024
