“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”
Dated: 08.04.2025
CESTAT Bangalore- The rejection of the refund claims was deemed unsubstantiated and not tenable
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore, recently delivered a pivotal decision in favor of Tommy Hilfiger Arvind Fashion Pvt. Ltd. regarding refund claims for Special Additional Duty (SAD) on imported garments.
Background of the Case:
Tommy Hilfiger Arvind Fashion Pvt. Ltd. imports readymade garments, paying requisite customs duties including SAD under Section 3(5) of the Customs Tariff Act, 1975. After sales across India, accompanied by payments of VAT or Central Sales Tax, the company claimed refunds of the SAD as per Notification No. 102/2007-Cus.
Initial Challenges:
Customs authorities initially denied these refunds, alleging insufficient proof linking imported garments to those sold domestically due to descriptive discrepancies in documentation.
Tribunal’s Considerations:
The Tribunal evaluated the robustness of the company’s internal tracking mechanism—the customized software ‘Voyager’—which assigns unique alpha-numeric codes to imported garments for accurate tracking and correlation. Further support came through certifications provided by a Chartered Accountant verifying the precise correlation between imported garments and domestic sales.
Key Highlights of the Decision:
- Recognition of ‘Voyager’ as a credible, reliable internal system.
- Acceptance of Chartered Accountant certifications confirming VAT/CST payments and correlating import and sales.
- Determination that customs authorities’ rejection lacked substantiation.
Tribunal Verdict:
The appeal was conclusively allowed, granting the refund claims initially rejected by customs authorities.
In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.
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Source: CESTAT Bangalore
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