Refund of Special Additional Duty (SAD) for goods sold via consignment agents is contingent upon strict compliance with Board Circular No. 16/2008, requiring specific invoice endorsements and a Chartered Accountant certificate to establish a verifiable link between the imported goods and the domestic sale.

The present appeal has been filed by M/s. Bagadia Brothers (the appellant herein), against the impugned Order-in-Appeal No. 631/2015, dated 30.06.2015, wherein the refund of SAD claimed by the appellant was rejected. Aggrieved by the rejection of the refund of SAD, the appellant has filed this appeal.

2. The facts of the case are that the appellant has imported “CRNGO steel sheets in Coils” on payment of 4% Additional Duty of Customs (SAD). Subsequently, the appellant sold part of the goods through Consignment Agent on payment of VAT and filed a refund claim for the refund of the SAD paid at the time of import. The Lower Authorities found that the sales invoices issued by the ‘Consignment Agent’ and subsequently sold by M/s. Vardhaman Udyog, New Delhi did not indicate the details as required under para 2(viii) of the Board Circular No. 16/2008, dated 13.10.2008. Accordingly, the refund claim filed by the appellant came to be rejected.

3. The Ld. Counsel for the appellant submits that the appellant have sold part consignment through the consignment agent, which has been subsequently sold by M/s. Vardhaman Udyog, New Delhi, vide sales invoices No. 1 to 8 all dated 08.04.2013. He submits that as the SAD payment was not in dispute and the goods have been subsequently sold on payment of VAT, they are eligible for the refund of the SAD paid at the time of import. Thus, he prays for setting aside the impugned order and allowing the refund claimed by them.

4. The Ld. Authorized Representative appearing on behalf of the Revenue, submitted that the Board has issued circular No. 16/2008 dated 13.10.2008, specifying the procedure prescribed in respect of the refund of the SAD where sales are effected through the ‘Consignment Agents’. It is submitted that in the present case, the appellant did not comply with the requirements to identify that the same goods imported have been sold to M/s. Vardhaman Udyog, New Delhi. She submits that the Lower Authorities have verified the documents and rightly rejected the refund of the SAD paid by the appellant. She also submits that the appellant has not submitted the Chartered Accountant Certificates as required under the Board Circular No. 16/2008 dated 13.10.2008. Accordingly, she supports the impugned order rejecting the refund claim.

5. Heard both sides and perused the appeal documents.

6. I find that the appellant has imported CRNGO steel sheets in Coils on payment of 4% SAD at the time of import. Subsequently, the appellant raised sales invoices No. 423 to 429, all dated 27.03.2013 and sold part consignment through the consignment agent, which has been subsequently sold by M/s. Vardhaman Udyog, New Delhi, vide sales invoices No. 1 to 8 all dated 08.04.2013.

6.1. I find that the Board has issued Circular No. 16/2008 dated 13.10.2008 prescribing the procedure to be followed when the imported goods are sold through Consignment Agent and the refund of SAD has been claimed. For ready reference, the relevant part of the said Circular is reproduced below:

“In view of the above, it is clarified that in case of sale of imported goods by importer through consignment agent/stockist, refund of 4% CVD shall be granted by Customs field formations, subject to the condition that the Consignment agent/ stockist has been authorised to sell the Imported goods in terms of the agreement entered into between the importer and consignment agent/stockist and that each of the sale invoices issued by the consignment agent/stockist indicates that the sale is made by him on beha