Tribunal Rules Procedural Lapses Can't Deny Refunds if Substantive Conditions Are Fulfilled; Upholds Time-Barred Claims
In a significant judgment, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Regional Bench, partially allowed the appeal of M/s. WR Grace & Co. India Pvt. Ltd. against the Commissioner of Customs. The appeal was concerning the refund of 4% Additional Duty of Customs, amounting to Rs. 11,80,888, paid on the import of construction materials through 11 bills of entry. The judgment, delivered by Mr. Vasa Seshagiri Rao, Member (Technical), emphasized that procedural lapses, such as the submission of a Chartered Accountant Certificate not being in the prescribed format, should not be the sole grounds for denying the substantive benefit of a refund.
The dispute arose when the appellant's refund claim was rejected by the adjudicating authority due to the non-fulfillment of certain procedural requirements under Notification No. 102/2007-Customs and Circular No. 16/2008. The appellant had failed to submit the VAT challans and the Chartered Accountant Certificate in the prescribed format. Additionally, four of the refund claims were found to be time-barred as they were filed beyond the stipulated period of one year from the date of payment of duty.
Despite these procedural lapses, the tribunal ruled in favor of WR Grace & Co. India Pvt. Ltd. for seven bills of entry, stating that the substantive conditions for claiming the refund were adequately met. The tribunal noted that the format of the Chartered Accountant Certificate was suggestive and not mandatory, thereby dismissing the rejection based on the format issue. Furthermore, it acknowledged the appellant's compliance with the requirement to provide documents evidencing payment of VAT/CST, certified by a Chartered Accountant.
However, the tribunal upheld the decision regarding the four time-barred claims, reiterating the importance of adhering to the statutory deadline for filing refund claims as per the amended Notification No. 93/2008 dated 01.08.2008.
This judgment underscores the principle that procedural technicalities should not overshadow substantive compliance in the adjudication of customs duty refunds. The decision provides relief to importers facing similar procedural challenges while affirming the necessity of adhering to statutory timelines.
Bottom Line:
Refund of 4% Additional Duty of Customs cannot be denied solely on the ground of procedural lapses, such as Chartered Accountant Certificate not being in the prescribed format, provided the substantive conditions for claiming the refund are met.
Statutory provision(s): Customs Act, 1962, Notification No. 102/2007-Cus dated 14.09.2007, Notification No. 93/2008 dated 01.08.2008, Circular No. 16/2008 dated 13.10.2008, Public Notice No. 39/2011 dated 14.06.2011
