Per Mr. VASA SESHAGIRI RAO

The present appeal has been filed by M/s. Cape Electric Corporation, Oragadam (hereinafter referred to as “the appellant”) assailing Order-in-Appeal No. 320/2016 dated 29.09.2016 passed by the Commissioner of Customs (Appeals-I), Chennai, whereby rejection of SAD refund claims filed under Notification No.102/2007-Cus. was upheld on the ground that reconstructed copies of certain sales invoices produced during de novo proceedings did not contain the prescribed endorsement regarding non-admissibility of CENVAT credit. The impugned order, however, also records that the original refund files had been misplaced by the department and that the original invoices initially produced by the appellant contained endorsement conveying that CENVAT credit was not allowable.

Briefly stated, the appellant filed three SAD refund claims aggregating to Rs.18,82,526/- under Notification No.102/2007-Cus. in respect of imports covered under 27 Bills of Entry. The claims were initially rejected on the ground that the sales invoices did not contain proper endorsement regarding non-admissibility of CENVAT credit. Though the matter was remanded by the Commissioner (Appeals) for verification, the original refund files were admittedly misplaced by the department during de novo proceedings and the appellant was directed to reconstruct the records. The claims were thereafter again rejected on the ground that certain reconstructed copies of invoices did not contain the prescribed endorsement, which rejection came to be upheld in the impugned order.

The Ld. Advocate Ms. S. Sridevi appeared on behalf of the Appellant and advanced detailed submissions in support of the Appeal and the Ld. Authorized Representative Shri Vineet Goyal appeared for the Revenue.

The Ld. counsel for the appellant submitted that the impugned order is unsustainable both on facts and in law. It was contended that the appellant had originally submitted all documents required under Notification No.102/2007-Cus., including Bills of Entry, TR-6 challans, sales invoices, VAT/ST payment proof and Chartered Accountant certificate, and that the original adjudicating authority itself had recorded verification of the invoices. It was further submitted that after remand by the Commissioner (Appeals), the department admittedly misplaced the original refund files and called upon the appellant to reconstruct the records and therefore could not subsequently reject the claims based on doubts arising from reconstructed copies. The learned counsel submitted that omission of endorsement was noticed only in certain office copies relating to a few invoices and that the appellant itself had voluntarily agreed for proportionate reduction to that extent, thereby establishing bona fides. Reliance was placed on the Larger Bench decision in Chowgule & Co. Pvt. Ltd. v. Commissioner of Customs reported in 2014 (306) ELT 326 (Tri.-LB) and other decisions including LG Electronics India Pvt. Ltd., Vestal Impex Pvt. Ltd., Nova Nordisk India Pvt. Ltd., Tomlukes India Pvt. Ltd. and RKG International Pvt. Ltd. to contend that the endorsement requirement is procedural in nature and substantive SAD refund cannot be denied once payment of SAD and subsequent VAT-paid sales are established. The Ld. counsel therefore prayed for setting aside the impugned order and allowing the appeal with consequential reliefs.

The Ld. Authorized Representative appearing for the Revenue reiterated the findings contained in the impugned order.

We have carefully considered the rival submissions, perused the records of the case, refund documents, orders passed by the authorities below, Ombudsman proceedings and the judicial precedents relied upon by both sides.

On consideration, we find that the issue involved in the present appeal lies in a narrow compass, namely, whether the SAD refund claims filed by the appellant under Notification No.102/2007-Cus. could be rejected on the ground of absence/improper endorsement in cert