Custom, Excise & Service Tax Tribunal
Kohli Graphics Systems vs Cochin-Cus on 30 July, 2024
Customs Appeal No. 20868 of 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
Regional Bench COURT-2
Customs Appeal No. 20868 of 2015
[Arising out of the Order-in-Appeal No. COC-CUSTM-000-APP-405-
14-15 DT-11-12-14 dated 14.01.2015 passed by the Commissioner
of Customs (Appeals), Cochin-9.]
M/s. Kohli Graphics Systems,
808, Naurang House,
21, Kasturba Gandhimarg,
New Delhi - 110001 ....Appellant
VERSUS
Commissioner of Customs,
Customs House,
Cochin
Kerala - 682009 ....... Respondent
Appearance:
None Advocate Appeared for Appellant Mr. Rajesh Shastry, Authorized Representative for Respondent Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) FINAL ORDER No. 20589 of 2024 Date of Hearing: 31.01.2024 Date of Decision: 30.07.2024 Per: Pullella Nageswara Rao The appellant imported "ECRM MAKO NEWSMATIC 250 (Fully Automatic) CTP PLATESETTERS" and filed Bill of Entry No. 4743559 dated 26.09.2011 and paid Rs. 2,83,880/- as Additional Duty (SAD). The appellant filed refund claim of SAD, Page 1 of 8 Customs Appeal No. 20868 of 2015 which was rejected by the Adjudicating Authority on the grounds that the appellant has not complied with the condition at Para 2(b) of Notification No. 102/2007-Cus dated 14.09.2007. The Adjudication Authority held that:-
"7. Para 2(b) of the Notification No. 102/2007-Cus Dt. 14.9.2007, stipulates that the importer shall specifically indicate in the sale invoices regarding the non-admissibility of Cenvat credit and the importer has failed to comply with the same.
8. The sale invoices have been raised prior to the "Out of Charge" given for the goods i.e prior to 28.09.2011.
9. The CA Certificate submitted by the importer does not rule out the case of unjust enrichment comprehensively as required vide Annex.III to the notification no. 102/2007."
2. Aggrieved by said order, the appellant filed an appeal before the Commissioner (Appeals). Commissioner (Appeals) upheld the order of the Adjudication Authority holding that; the sales invoice furnished by the appellant was without specific declaration as stipulated in Para2(b) of the Notification No. 102/2007-Cus dated 14.09.2007; the sale invoices have been raised prior to the "Out of Charge" given for the goods i.e., prior to 28.09.2011; further the Chartered Accountant Certificate does not rule out the aspect of unjust enrichment. Aggrieved by the Page 2 of 8 Customs Appeal No. 20868 of 2015 Order of the Commissioner (Appeals) appellant filed this appeal before the Tribunal.
3. The appellant has contended that; they have complied with all the conditions stipulated in Notification No. 102/2007-Cus dated 14.09.2007 and they have affixed a rubber stamp which reads as "Note-No CENVAT Credit is admissible" on the sale invoices of the impugned imported goods. Thus, they have made it clear that the duty paid under the relevant invoice was not Cenvatable; the goods were sold to M/s. Mathrubhumi and they have not charged any amount paid by them as additional duty; Hence, M/s. Mathrubhumi cannot take any credit on the said amount; M/s. Mathrubhumi is a publishing house, publish newspapers & periodicals only and do not undertake any manufacturing activity or provide any taxable services; Therefore, there is no question of availing credit by them under CENVAT Rules, 2004; The appellant relied on the case of CC Vs Malwa Industries-2009 (235) ELT 214, wherein Hon'ble Supreme Court has held that:-
"20. We, as noticed hereinbefore, have no quarrel with the proposition that exemption notification should be construed strictly which means that benefit thereof should not be granted to one, who is not entitled therefor. But it is also true that those who are entitled to the benefit cannot be deprived therefrom by taking recourse to the doctrine of narrow interpretation simplicitor, although the purpose and object thereof would be defeated thereby."Page 3 of 8
Customs Appeal No. 20868 of 2015 Further the appellant relied on the following case laws;
i. Equinox Solutions Vs. CC (2011 (271) ELT 310, CESTAT, Mumbai ii. Corporation Bank Vs. Saraswathy Abharanasala 2010 (18) STR 513 SC.
4. The appellant contended that the Commissioner (Appeals) has upheld the findings of the Original Authority in rejecting the refund claim on the ground that the sale invoices the issue prior to the date of "Out of Charge" i.e., 28.09.2011; the Bill of entry was filed on 26.09.2011 and duty was paid on the same day and hopeful of getting the goods on the same day, as the goods were to be supplied to the buyers directly after the clearance they have issued the invoices on the same day i.e., 26.09.2011. However, out of charge was given on 28.09.2011; there is no charge that the goods sold are different from the goods vide the impugned bill of entry.
5. The appellant further submitted that the Original Authority has accepted the Chartered Accountant's Certificate and had not found any fault, however Commissioner (Appeals) has come to a conclusion that Chartered Accountant's Certificate does not rule out the aspect of unjust enrichment; in this regard Chartered Accountant M/s Anuj Garg & Company have categorically certified that the burden of 4% CVD/SAD has not been passed on by the importer to the buyer and they fulfilled the requirement of unjust enrichment. The appellant contends that the Chartered Accountant's Certificate is admissible in evidence Page 4 of 8 Customs Appeal No. 20868 of 2015 in respect of unjust enrichment and relies on the following Circular/case law:
(i). CBEC Circular 16/2008 Cus dt 13.12.2008
(ii). CCE Vs Flow Tech Powere-2005 (187) ELT 399.
6. The learned Authorised Representative for the Revenue has reiterated the findings in the Impugned Order. None appeared for the appellant.
7. Heard the Authorised Representative for the Revenue and perused the records. We find that the issue involved is whether the appellant has fulfilled the stipulated conditions of Notification No. 102/2007-Cus dated 14.09.2007. We find that the Adjudicating Authority in his findings held that the stipulated conditions for claim of refund under Notification No. 102/2007- Cus dated 14.09.2007 have been fulfilled and is also accepted the Chartered Accountant's Certificate with regard to the unjust enrichment. However, he has rejected the refund claim only on the ground that there is no specific declaration on the invoice with respect to the condition mentioned at para 2(b) of Notification No. 102/2007. We find that the appellant has sold the imported goods to M/s. Bennet Coleman Company Ltd, Kochi, Kerala C/o. M/s. Mathrubhumi, Trivandrum, Kerala as per the invoice raised by the appellant to M/s. Bennet Coleman Company Ltd., has paid CST at 2% (C-Form).
8. Notification 102/2007-Cus dated 14.09.2007, clause -2 reads as under;
Page 5 of 8
Customs Appeal No. 20868 of 2015
2. The exemption contained in this notification shall be given effect if the following conditions are fulfilled:
(a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods;
(b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;
(c) the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer,
(d) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be;
(e) the importer shall, inter alia, provide copies of the following documents along with the refund claim:
(i) document evidencing payment of the said additional duty;
(ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed;
(iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods.
[Emphasis supplied]
9. The Jurisdictional customs officer i.e., the Adjudicating Authority observed that the declaration on the invoice reads as "Note-No Cenvat Credit is admissible" instead of specifically Page 6 of 8 Customs Appeal No. 20868 of 2015 indicating in the invoice that "in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible", therefore rejected the refund claim. We find that the declaration made by the appellant on the sale invoice though is not as per the phrase used in the Notification it conveys the purpose of such required declaration. Hence rejection of refund claim on this ground is not sustainable. Further the appellant has also submitted the Chartered Accountant's certificate, which inter-alia mentions at para 6 as under:
"6. For coming to such conclusion that the burden of 4% Additional Duty has not been passed on by the importer to the buyer or any other person and that the requirement to rule out unjust enrichment has been fulfilled, we further give the following explanation/justification / grounds:
(i) The 4% Additional Duty being claimed as refund has been shown in the Books of Accounts/Balance Sheet / Trial Balance for the period 2011-2012 as 'Receivables / Recoverable in cash /.' under the sub-heading "Loans & Advances / the head, 'Current Assets/ .'
(ii) The 4% Additional Duty claimed as refund has not been charged to 'Expenses/ in the Profit and Loss Account of the company and therefore the same is not forming part of the cost of the goods and hence the burden of 4% AD is not being passed on to the buyer or any other person."
10. We find that in the impugned order it is held that; the appellants have failed to comply with stipulated requirements of the notification which stipulates that the importer shall specifically indicate in the sales invoices regarding non- Page 7 of 8
Customs Appeal No. 20868 of 2015 admissibility of cenvat credit; the Chartered Accountant's Certificate does not rule out the aspect of unjust enrichment.
11. We find that the declaration of the appellant on the sales invoices would suffice the requirement at Para 2(b) of Notification No. 102/2007-Cus dated 14.09.2007 as regards the declaration of non-admissibility of Cenvat credit. Further, the Chartered Accountant's Certificate clearly mentions that the burden of 4% of additional duty is not being passed on to the buyer or any other person. Further, as regards the sales invoices being raised prior to the "Out of Charge" the submissions of the appellant are tenable in the circumstances of the case.
12. In view of the above discussion and the catena of decisions on the issue the refund claim needs to be allowed. Accordingly, the appeal is allowed with consequential relief, if any as per law.
(Order Pronounced in Open court on 30.07.2024) (P.A. Augustian) Member (Judicial) (Pullela Nageswara Rao) Member (Technical) Sasidhar Page 8 of 8