M/S. Arushi Exports vs Commissioner Of Customs (Imports), ...

[Arising out of Order-in-Appeal No. 73/MCH/DC/CRARS/2012 dtd. 22/2/2012 passed by the Commissioner of Customs (Appeals), Mumbai Zone I]

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? =======================================================

M/s. Arushi Exports : Appellants

VS

Commissioner of Customs (Imports), NCH, Mumbai : Respondent

Appearance

Shri C.M. Sharma, Consultant for the Appellants Shri S.J. Sahu, Asstt. Commissioner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 3/8/2015 Date of decision: 3/8/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. 73/MCH/DC/CRARS/2012 dtd. 22/2/2012 passed by the Commissioner of Customs (Appeals), Mumbai Zone I, wherein Ld. Commissioner (Appeals), dismissed the appeal of the appellant.

2. The fact of the case is that appellant imported Poppy Seeds amongst other on payment of SAD. They filed refund claim in respect of refund of SAD in terms of Notification No. 102/07-Cus dated 14/9/2007. The goods imported by the appellant were transferred to their consignment agent M/s. Birendra Kumar Sandeep Kumar and subsequently goods were sold by the said consignment thru various consignment agents. The Adjudicating Authority sanctioned the refund claim of Rs. 22,77,408/-. However rejected the refund of Rs. 5,57,301/- on the ground that in respect of certain sales against Bill of Entry No. 882236 dated 10/2/2009 and No. 887759 dated 25/3/2009 sales invoices are not bearing endorsement sale is made by him on behalf importer in the capacity of consignment agent/stockist. This endorsement requires in terms of Board Circular No. 16/08 dated 13/10/2008. Aggrieved by the said portion of rejection of claim, appellant preferred Appeal before the Commissioner (Appeals) who concurring with Adjudicating Authority dismissed appeal of the appellant therefore appellant is before me.

3. Shri C.M. Sharma, Ld. Consultant appearing on behalf of the appellant submits that the method of sale is same in respect of sales for which refund was granted. Even though the endorsement required under Board Circular was not made in certain invoices, the nature of sale through consignment agent is otherwise established. In this regard he referred to the documents such as invoices issued by the appellant to their consignment agent, transport documents and sales patti which is summary details of the sales made by the consignment agent on behalf of appellant. He also referred to agreement of consignment sales between appellant and consignment agent. He invited my attention to the ledger of the appellant wherein consignment sales in respect of the relevant sale patti were accounted for. He submits that all these documents clearly establish that the sale of the goods was made on the consignment basis by the consignment agent, therefore even though the endorsement is not made, on the basis of above documents, it is established that sales were made on consignment sales bases, therefore merely for the reason that endorsement of consignment was not made on the invoices, refund could not have been rejected.

4. On the other hand, Shri S.J. Sahu, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the requirement of the endorsement is necessary to avoid the misuse of refund mechanism. Since the Notification No. 102/07-Cus is a exemption notification by way of granting refund, the procedure which has been laid down for granting refund should be scrupulously followed, otherwise there are chances that assessee can mis-use the said provisions. Therefore, non declaration of endorsement on the invoices is violation of the procedure and for such violation refund was rightly rejected by the original authority and upheld by the first appellate authority.

5. I have carefully considered the submissions made by both sides and perused the record.

6. I find from both the lower authorities order that refund was rejected only on the ground that procedure of endorsement to the effect consignment sale as prescribed under Board Circular No. 16/2008 was not followed and such endorsement not made on certain invoices. I find that entire agreement between appellant and consignment agent and entire sale made in consignment agent capacity. I observed that sale patti of the appellant wherein it was clearly mentioned that the sale is on account of Arushi Exports, this shows that sale made by the consignment agent is not on his own account, but it is consignment sale on account of appellant. It is also observed that from the ledger copy produced by the Ld. Counsel that all the four sale patti against which the refund was rejected were duly accounted in the books of account of the appellant towards consignment sale. On the basis of these undisputed facts it is found that the sales under dispute are consignment sales. If it is accepted from the corroborative documents, even if the declaration to the effect of consignment sale was not made could not be the reason for rejection of refund claim.

Moreover declaration of endorsement on the invoices is procedural requirement which is prescribed by the way of Board Circular and it cannot be as mandatory requirement for granting refund. It is also found that the Ld. Commissioner (Appeals) upheld the rejection on the ground that there is no endorsement of non passing of Cenvat credit on the invoices. It was observed that neither appellant nor consignment agents are registered dealer with Central Excise for passing of Cenvat credit to the ultimate customers. Revenue has not brought anything on record contrary to this fact and it is also not on record that credit otherwise was passed on to the customers. With these facts also, it is established that the Cenvat credit has not been passed on to the ultimate customer. In view of the above position, I am of the view, for the procedure lapse as considered by lower authorities; refund should not have been rejected. I therefore remand the matter to the original adjudicating authority to reconsider their refund alongwith consequential relief in view of the above observations and pass a fresh order.

It is expected to dispose of the refund within a period of two months from the receipt of this order. The appeal is allowed by way of remand.

(Dictated in court)

Ramesh Nair Member (Judicial)

sk

6 APPEAL NO. C/424/12