Avon Cycles Ltd v Commissioner of Customs (CESTAT Bangalore)

In the case of Avon Cycles Ltd v Commissioner of Customsthe main issue revolved around the refund of Special Additional Duty (SAD) amounting to ₹43,798. Avon Cycles imported bicycles under invoices of entry dated June 27, 2011 and August 18, 2011. After the sale of these bicycles and subsequent payment of sales tax, the company submitted a supported refund request by a certificate from a chartered accountant. This certificate confirmed that the recipient had not claimed CENVAT credit on the DAD paid, as he did not have central excise registration. However, the refund request was rejected because Avon Cycles failed to include the necessary amendment on the original sales invoices as stipulated in paragraph 2(b) of Notification No. 102/2007-Cus.

Following the rejection, Avon Cycles appealed to the Commissioner (Appeals), who upheld the original decision on the same grounds. At subsequent hearings, counsel for the appellant argued that the reimbursement request included adequate documentation to meet the criteria set out in the notice. They cited precedent set by a larger court in the case of M/s Chowgule & Company Pvt Ltd v CCC & C.Ex. This precedent established that merchants who paid the DAU on imported goods and subsequently discharged their VAT or sales tax obligations could be entitled to a refund without having to explicitly declare that “the credit of duty is not admissible” on their commercial invoices. The Tribunal considered the case and found that the conditions required for notification were sufficiently met by Avon Cycles, leading to the conclusion that the appeal should be allowed, thus confirming their right to reimbursement.

FULL TEXT OF THE BANGALORE CESTAT ORDER

The issue raised in the present appeals relates to refund of additional special duty amounting to Rs.43,798/-. The appellant had imported “Bicycles” under bills of entry dated 27.06.2011 and 18.08.2011. After the sale of the goods, against payment of sales tax, the appellant submitted a refund application along with a certificate issued by the assessee of the assessee certifying that he did not avail CENVAT credit on the ACD/SAD paid because it does not hold central excise registration. However, the refund claim was rejected on the ground that the appellant had not made appropriate notation in the original sales invoices as per paragraph 2(b) of Notification No. 102/2007-Cus dated 14.09. 2007 as amended. Aggrieved by the said order, an appeal was filed before the Commissioner (Appeals) and the Commissioner (Appeals) also dismissed the appeal on the same ground. Aggrieved by the said order, the present appeal is filed.

2. When the appeal was heard, the appellant’s counsel submitted that they had submitted sufficient documents, as per the ibid notification, to claim the amount due. The learned counsel further submits that the question is clearly covered by the decision of the Grand Formation in the case of M/s Chowgule & Company Pvt Ltd v CCC & C.Ex (2014 (306) ELT 326 (Tri. LB), in which it is considered that the traders who have paid DAU on imported goods, who have paid VAT/sales tax on subsequent sales and who have issued commercial invoices without indicating any details of the duties paid would be entitled to benefit from the exemption under of notification No. 102/2007-Cus. dated 14.09.2007, even though he did not indicate on the commercial invoices that “duty credit is not admissible” subject to the satisfaction of the other conditions stipulated therein. The Council also relied on the decision of the General Court in the case M/s Equinox Solution Ltd v. Commissioner of Customs (Import), Mumbai (2011 (272) ELT 310 (T) and M/s Chowgule & Company Pvt Ltd v. Commissioner of Central Excise, Goa (2015 (315) ELT 417 (T) ).

3. The authorized representative (AR) of the Revenue reiterated the conclusion and maintains that the appellant is not eligible to claim the DAS, since he did not comply with the conditions of the notification.

4. I have heard both sides and gone through the records. It is not in dispute that the refund application was filed with a certificate issued by the assessee’s chartered accountant certifying that he did not avail CENVAT credit on the ACD paid, as he is not registered with central excise. Thus, the question is squarely covered by the decision of the Grand Chamber in the case of M/s Chowgule & Company Pvt.,, (Supra). Therefore, the appeal is allowed with consequential relief, where appropriate in accordance with law.

(Order pronounced in public hearing on 09/13/2024)