2015 (1) TMI 323 - AT - Customs

Application of stay on refund - Denial of them the benefit of Notification No. 102/2007-Cus., dated 14-9-2007 - Held that - Special CVD is as per sub-section 5 of Section 3 of CETA, 1985. The Special CVD is levied for counter-balancing for Sales Tax/VAT. Undisputedly, the Sales Tax/VAT is exempted in this case. In this regard, learned Commissioner (Appeals) has found that the element of CVD is a tax in lieu of Sales Tax/VAT and that once the Importer fulfils the obligation of paying both the CVD and the Sales Tax/VAT, then he is entitled to refund of the CVD he had paid. It is pertinent to mention here that what is abated cannot be taken away indirectly. In these circumstances, we do not find any reason to stay the operation of the impugned Orders-in-Appeal. - Refund not to be stayed.

Summary

Issues:
Stay of operation of Orders-in-Appeal granting exemption under Notification No. 102/2007-Cus.

Analysis:
The Revenue filed applications for stay of operation of eight Orders-in-Appeal where the Commissioner (Appeals) allowed the Respondent's appeals against Orders-in-Original denying them the benefit of Notification No. 102/2007-Cus. The contention by the learned AR was that the Special CVD is levied as per the provisions of sub-section 5 of Section 3 of the Central Excise Tariff Act, 1985, and the exemption under the said Notification is subject to conditions related to Sales Tax/VAT payment. The AR argued that the Commissioner's finding that no Special CVD should have been levied due to exemption from Sales Tax/VAT was incorrect as per the interpretation of the Notification.

The Respondent's advocate contended that the Special CVD is for counter-balancing Sales Tax/VAT, which was exempted in their case by a Notification from the Government of India. The advocate referred to the Commissioner's findings in the impugned Order-in-Appeal to support this argument. The Tribunal found that the Special CVD is in line with sub-section 5 of Section 3 of CETA, 1985, and is levied to counter-balance Sales Tax/VAT. Since Sales Tax/VAT was exempted in this case, the Commissioner held that the Importer fulfilling the obligation of paying both CVD and Sales Tax/VAT is entitled to a refund of the CVD paid. The Tribunal noted that when goods are exempted from Sales Tax, there is no requirement to pay CVD, simplifying the matter.

The Tribunal emphasized that what is abated cannot be indirectly taken away. Therefore, considering the circumstances and the interpretation of the law, the Tribunal dismissed the Stay Petitions, concluding that there was no reason to stay the operation of the Orders-in-Appeal. The judgment was dictated and pronounced in open court.