CA Certificate Sufficient To Grant Special Additional Duty Refund Claim: CESTAT

The Banglore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that once a CA certificate is produced, in the absence of any allegation of fraud or collusion, such a certificate is sufficient to grant the refund claim. The Special Additional Duty (SAD) refund should not be denied merely for technical violations.

The bench of P.A. Augustian (Judicial Member) has observed that the amount paid by the appellant as 4% SAD is not passed on to the buyers, and the said aspect was confirmed by the statutory auditor of the appellant while issuing the certificate on June 5, 2012.

The appellant/assessee had re-imported goods, and they were cleared on payment of customs duty and 4% SAD as per Notification No. 102/207 dated September 14, 2007. The goods were sold, and on payment of VAT, the appellant submitted a refund claim for a refund of 4% SAD.

However, the refund application was rejected on the ground that the CA certificate did not state how the unjust enrichment was not applicable.

The assessee filed an appeal before the Commissioner (Appeals), and the Commissioner (Appeals) remanded the matter to adjudication authority with a direction to the appellant to submit an explanation from their CA as to how they arrived at the conclusion that the duty amount was not passed on to the customers.

The adjudication authority considered the issue, and even after submitting a detailed explanation by the statutory auditor, the adjudication authority allowed a partial a partial refund.. An amount of Rs. 3,29,226/- was allowed against a refund claim of Rs. 5,92,973/-, and said amount is also credited to the Consumer Welfare Fund. An appeal was filed before the Commissioner (Appeals), and the Commissioner (Appeals) upheld the order of the adjudication authority.

The assessee contended that the refund application had sufficient documents and was also supported by a certificate issued by the Chartered Accountant, supported by a statement showing the calculation of the refund of SAD. Moreover, the initial certificate produced by the appellant clearly indicates that the amount claimed in the refund has not been included in the selling price and has not been collected from the customers. The amount stands receivable in their books of accounts for the financial year 2008–09.

The department contended that the appellant has not fulfilled the requirement of unjust enrichments, and they have not shown the due amount as receivable in the financial year 2007–08, and it is shown as receivable only for the financial year 2008–09. The appellant is not eligible for the refund as claimed by them.

The tribunal, while rejecting the refund claim, allowed the appeal.

Counsel For Appellant: Tanmayee Rajkumar

Counsel For Respondent: Tanmayee Rajkumar

Case Title: M/s Faxtel Systems (India) Versus Commissioner of Customs Bangalore

Case No.: Final Order No.: 20509 / 2024

Click Here To Read The Order