2016 (3) TMI 512 - AT - Customs

Admissibility of refund claim of SAD - Under Notification No.102/2007-CUS, when VAT stand exempted in the state of Uttar Pradesh - Held that - by relying on the case of M/s.Gazal Overseas, and Others vs. Commissioner of Customs, New Delhi 2015 (12) TMI 427 - CESTAT NEW DELHI , SAD refund has been held to be admissible where VAT paid is nil. Therefore, the respondents are liable to claim refund of SAD paid at the time of importation. - Decided against the revenue

Summary

Issues involved:
1. Admissibility of refund of Special Additional Duty (SAD) under Notification No.102/2007-CUS when VAT is exempted in the state of Uttar Pradesh.

Analysis:
The Appellate Tribunal CESTAT Kolkata heard Stay Applications and Appeals filed by the Revenue against an Order-in-Appeal allowing Appeals by the Respondents. The main issue was whether SAD paid during importation is admissible under Notification No.102/2007-CUS when VAT is exempted in Uttar Pradesh. The First Appellate Authority relied on a case law and held the refund of SAD admissible to the Respondents. The Respondents cited another case law where SAD refund was allowed when VAT paid was nil. The Tribunal considered these arguments and case laws before making their decision.

The Tribunal examined the case records and noted that the issue revolved around whether SAD refund is permissible when VAT is exempted in Uttar Pradesh. The Tribunal referred to the case law cited by both parties and observed that the condition for SAD refund under the notification was payment of appropriate sales tax or VAT. They highlighted a circular clarifying that the exemption did not depend on the rate of VAT being equal to or higher than the rate of additional duty of Customs. Therefore, as long as appropriate VAT or sales tax was paid, SAD refund was admissible even if the rate was less than SAD or nil. The Tribunal concluded that if the appropriate rate of VAT was nil, then the appropriate sales tax or VAT paid would also be nil. Based on this interpretation of the law and the case laws cited, the Appeals filed by the Revenue were dismissed, and the Stay Applications were disposed of.

In summary, the Tribunal's decision hinged on the interpretation of the conditions for SAD refund under Notification No.102/2007-CUS in the context of VAT exemption in Uttar Pradesh. They emphasized that as long as appropriate VAT or sales tax was paid, SAD refund was admissible, even if the rate was lower than SAD or nil. This interpretation was supported by relevant case laws and a circular clarifying the conditions for the refund.