Custom, Excise & Service Tax Tribunal
M/S. House Full International Ltd vs Commissioner Of Customs(Import), ... on 10 November, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/534/12-MUM
(Arising out of Order-in-Appeal No. 151(CRC-IIB)/2012 JNCH-IMP-134 dtd. 21/3/2014 passed by the Commissioner Customs (Appeals), JNCH, Sheva Mumbai-II)
For approval and signature:
Honble Mr Ramesh Nair, Member(Judicial)
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1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. House Full International Ltd.
:
Appellant
VS
Commissioner of Customs(Import), Mumbai
:
Respondent
Appearance
Shri. Prasad Paranjape, Advocate for the Appellants
Shri. D.D. Joshi, Asst. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 10/11/2014
Date of decision 10/11/2014
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in-Appeal No. 151(CRC-IIB)/2012 JNCH-IMP-134 dtd. 21/3/2014 passed by the Commissioner Customs (Appeals), JNCH, Sheva Mumbai-II, wherein order of the original authority dated 10/3/2011 was upheld. The fact of the case is that the appellant filed refund claim under Notification 102/2007-Cus dated 14/9/2007 for 4% SAD of custom duty amounting to Rs. 4,40,504/-against 9 bills of entry. Refund was rejected by the original authority on the ground that the original sale invoices were not submitted and the invoices so issued do not bear the declaration regarding non admissibility of cenvat credit by the buyers. The appellant filed appeal before the Ld. Commissioner(Appeals), who has upheld order of the original authority, therefore the appellant is before me.
2. Shri. Prasad Paranjape, Ld. Counsel for the appellant submits that the appellant is importer and they sales the goods in retail to individual consumer by issuing computer generated retail invoice. He further submits that the appellant has submitted soft copy of the said retail invoices alongwith their refund claim which is permissible in term of CBEC circular no. 16/2008-Cus dated 13/10/2008. As regard endorsement of non admissibility of cenvat credit to the buyer, he submits that the appellant is not registered dealer and not eligible to issue cenvatable invoice. The goods imported is consumer goods and sold to household consumer, therefore there is no question of passing on the cenvat credit to the buyer. He also submits that there is no mention of SAD and amount thereof on the retail sale invoice hence the cenvat credit in fact not passed on. In respect of his submission he relied upon following judgments of this Tribunal.
1) Novo Nordisk India Pvt. Ltd. Vs. CC(ACC&Import) [2013(292) ELT 252(Tri-Mum)
2) Maruti Suzuki India Ltd. Vs. CC(Import), Mumbai [2013(296) ELT 100(Tri-Mum)
3) RKG International Pvt. Ltd. Vs. CCE&Cus. Noida [2013(290) ELT 253(Tri-Del)
4) Equinox Solution Ltd. Vs. Malva Industries Ltd.
[2011(272) ELT 310 (Tri-Mum) It is his submission that even endorsement is not made on retail sale invoice, refund can not be rejected as it is evident that cenvat credit was neither available nor passed on.
3. On other hand, Shri. D.D. Joshi, Asst. Commissioner (A.R.) reiterated the impugned order. He submits that the benefit of notification could not be extended, if any, of the condition of the notification is not complied with. In the present case the refund was rightly rejected as condition of No. 2(b) and 2 (e) (ii) have not been fulfilled by the appellant.
4. I have carefully considered the submissions made by both the sides.
5. The dispute involved is admissibility of the refund of SAD under notification No 102/2007-Cus. The lower authority rejected the refund claim on the following two grounds:
(1) The appellant has not submitted original invoices.
(2) The sale invoice does not bear endorsement of non admissibility cenvat credit to the buyer. As regard non submission of original invoices the appellant has admittedly submitted the soft copy of the retail sale invoices. The submission of soft copy has been made acceptable by the Central Board of Excise and Custom circular No. 16/2008-Cus dated 13/10/2008 in para III which is reproduced below:-
(iii) Sale invoices to be submitted in soft form for claiming refund: It has also been represented that number of copies of sale invoices are required to be produced in view of the Condition No.2 (e) (ii) of the Notification No.102/2007-Customs dated 14.9.2007. As these are voluminous, it is difficult for the importers as well as the Department to handle such invoices in hard copy. This issue was examined in specific reference to Section 4 of the Information Technology (I.T.) Act, 2000 which provides that any information or any other matter, which is required under any Law to be made in writing or printed form, could be submitted in an electronic form provided it is accessible for use or subsequent reference. In view of the fact that this provision applies notwithstanding anything contained in any other law, the legal requirement of submission of copies of sale invoices would be fulfilled if the same is provided in electronic form. In the I.T. Act, 2000, electronic form has been defined and it includes information stored in optical or magnetic media.
From above clarification of the Board it is clear that the appellant has complied with the condition no. 2(e) (ii) of the notification 102/2007-Cus therefore appellant cannot be insisted upon to submit the original invoices and the refund claim should not have been rejected on this ground. It is also observed that the importer is selling imported goods in retail from the retail show room to individual customer and from various cities and showrooms. Therefore it is obvious that the entire invoices are practically not possible to be produced. This is very reason, the Board has given the option to submit the invoice in soft copy. As regard the issue that the appellant has not made endorsement of cenvat credit on their sale invoices, it is fact that the appellant is neither registered dealer under Central Excise for passing on cenvat credit nor the goods is cenvatable items. The purpose of such endorsement is with a objective that there should not be availement of double benefit that is :-
1) by claiming refund.
2) by availment cenvat credit by the buyer.
If from the fact it is established that cenvat credit is neither passed on nor availed by the buyer. The condition of endorsement stand fulfilled. On very same issue, this Tribunal consistently held that where the importer is not registered with Central Excise for passing on the cenvat credit it is not possible to pass on cenvat credit in respect of SAD. The relevant judgment and its relevant paras are reproduced below:-
1) Novo Nordisk India Pvt. Ltd. Vs. CC(ACC&Import) [2013(292) ELT 252(Tri-Mum)
5.?We have carefully considered the submissions made by both sides. The purpose of a declaration as stipulated in para 2(b) of Notification No. 102/2007-Cus., dated 14-9-2007 is to deny double benefit i.e. the buyer of the goods takes the credit of the SAD paid, while the seller gets refund of the SAD paid. In order to prevent this, the aforesaid declaration has been prescribed in the Notification. However, in the present case, the appellant is not a registered dealer who is authorized to issue Cenvatable invoices. Secondly, the invoices issued by the appellant, copies of which we have perused, do not indicate the SAD paid. Cenvat credit can be availed only when the invoices are issued by a manufacturer or an importer or a registered dealer. Inasmuch as the appellant is not a registered dealer, the question of taking credit on the strength of invoices issued by him does not arise at all. Further, the invoices do not indicate the amount of SAD paid. In the absence of such a detail, the question of availing Cenvat credit also does not arise. Thus, the object and purpose of the declaration is achieved in the present case. The appellant has paid SAD at the time of importation and they also paid Sales Tax/VAT while selling these goods and therefore, the appellant is rightly entitled for the benefit of refund under the aforesaid Notification subject to the bar of unjust enrichment. It is a settled position in law that, substantive benefit of an exemption notification should not be denied on the ground of procedure or technical infraction. Further, on an identical matter, this Tribunal in the cases cited supra have held that refund would be admissible even when a declaration envisaged under para 2(b) was not made on the invoices issued. Following these decisions, in the present case also, we hold that the appellant is eligible for the refund of duty as per Notification No. 102/2007-Cus. subject of course to the test of unjust enrichment.
2) Maruti Suzuki India Ltd. Vs. CC(Import), Mumbai [2013(296) ELT 100(Tri-Mum) 5.1?As regards the non-endorsement of non-availability of CENVAT credit of the SAD paid on the sales invoice, in the invoice issued by the appellant, there is no mention of SAD separately and therefore, the question of buyers taking any credit would not arise at all. In a similar case, where endorsement relating to SAD was not made on the sales invoices, in respect of sales through non-registered dealers this Tribunal vide Order No. A/58/2013/CSTB/C-I, dated 6-12-2012 in the case of Novo Nordisk India Pvt. Ltd. v. Commissioner of Customs (ACC & Import), Mumbai [2013 (292) E.L.T. 252 (Tri.-Mum.)] had held that substantive benefit of exemption Notification should not be denied on the ground of procedural or technical infraction, based on the decisions of this Tribunal in the case of Equinox Solution Ltd. v. Commissioner of Customs (Import), Mumbai - 2011 (272) E.L.T. 310 and Commissioner of Customs, Bangalore v. Kohler India Corporation Pvt. Ltd. - 2012-TIOL-182-CESTAT-BANG. In the present case also since the goods are cars, on which CENVAT is not available and the dealers through whom the goods are sold are also not dealers registered for CENVAT credit purposes, the question of the buyers availing any CENVAT credit would not arise at all. Therefore, non-endorsement of non-availability of SAD does not materially affect the refund claims.
3) RKG International Pvt. Ltd. Vs. CCE&Cus. Noida [2013(290) ELT 253(Tri-Del)
4.?We find that appellants have taken a categorical stand before authorities below that the invoices issued by them do not show the said amount. As such, their buyers are not in a position to claim the credit. It seems that there is no dispute on the above factual position. The refund claim has been denied on the technical ground of non-fixation of stamp on the invoice.
5) Equinox Solution Ltd. Vs. Malva Industries Ltd.
[2011(272) ELT 310 (Tri-Mum)
6.?To deal the first issue, I find that as per the condition 2(b) of the Notification no. 102/07, the appellants are required to make endorsement on the invoice that the SAD has not been passed on to the buyer. The ld. advocate has contended that the assessee is to avail the credit on the strength of invoice issued under the provisions of Central Excise Law/Customs Law/Service Tax laws, as per the provisions of Rule 9 of the CENVAT Credit Rules, 2004. When there is no mention of passing on duty in the invoice, the buyer cannot take credit of the said duty (SAD) which is not mentioned in the invoice. I do agree with this contention of the ld. advocate when there is no duty mentioned in the invoice, buyer cannot take credit of the same. Although there is a condition in the Notification to claim refund i.e. to make endorsement on the invoice, it may be relevant for the invoices which are issued under the Central Excise Law/Customs Law/Service Tax law showing specifically the duty suffered by the supplier on the goods shown in the invoice and the buyer is entitled to take the credit of the same. As pointed out by the Honble Apex Court in Malwa Industries (supra) the exemption Notification should be read liberally. In this case, compliance of condition 2(b) of the said Notification is not required of the clearance on commercial invoice. Following the ratio laid down by the Apex Court, I find the purpose of issuing the Notification is that the importer should not suffer SAD on the goods imported by them which have been imported for the purpose of resale and the proper ST/CSTA/VAT has been paid. SAD is to be paid by the importers as precaution measure to ascertain whether ST/CST/VAT has been discharge by the assessee or not. In this case, it has been clarified in the invoice which have been supported by the Chartered accountant certificate that the appellants have discharged the liability of Central Service tax. Hence as per Notification No. 102/07, the appellants are entitled for the refund claim.
From above judgments and coupled with facts of the case, it is undisputed that the appellant is not registered with Central Excise for passing on the cenvat credit. The goods involved in this case is household furniture which is sold to household consumer where question of availement of cenvat credit does not arise. Therefore there is no violation of any condition of notification 102/2007. The judgments referred support the case of the appellant. In view of my above discussion, I am of the considered view that the refund claim of the appellant ought not to have rejected by the lower authorities. The impugned order of the lower authority is set aside and appeal is allowed with consequential relief, if any, in accordance with law.
(Dictated in court) Ramesh Nair Member (Judicial) sk 10