2016 (12) TMI 1155 - AT - Customs

Rejection of refund claim - SAD - N/N.102/07-Cus dated 14.09.2007 - rejection on the ground that violation of actual user condition - Held that - Notification does to debar the sale of the imported goods if the same are imported under the actual user condition. If the Revenue is of the view that actual user condition stand violated by the assessee, they were within their rights to initiate action against the assesse for violation of the said condition - appeal rejected - decided against Revenue.

Summary

Issues:
1. Dispute over the refund of Special Additional Duties (SAD) in terms of notification 102/07-Cus dated 14.09.2007.
2. Rejection of refund claim by the Original adjudicating authority based on the grounds of goods being imported for actual use in manufacturing activity but sold with VAT payment.
3. Interpretation of conditions for refund under the notification in question.
4. Revenue's objection regarding violation of actual user condition under foreign trade policy due to non-use of imported goods.
5. Legal provision for denial of refund if goods are sold with VAT/CST payment after import.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Ms. Archana Wadhwa and Shri V. Padmanabhan, addressed the dispute concerning the refund of Special Additional Duties (SAD) under notification 102/07-Cus dated 14.09.2007. The Original adjudicating authority had rejected the refund claim, citing that the goods were imported for actual use in manufacturing but were sold with VAT payment, leading to the denial of the refund. However, on appeal, the Commissioner (A) observed that the conditions for refund under the notification had been fulfilled by the importer, including the sale of goods with VAT payment, and thus, the refund could not be denied based on this ground.

The Revenue raised an objection claiming a violation of the actual user condition under the foreign trade policy due to the non-use of the imported goods by the assessee. Nevertheless, the Commissioner (A) noted that there was no legal provision presented by the Revenue to support the denial of the refund if goods were sold with VAT/CST payment post import. The Tribunal concurred with the Commissioner (A)'s reasoning, emphasizing that the fulfillment of conditions specified in the notification entitled the importer to the refund. The Tribunal highlighted that the notification did not prohibit the sale of imported goods even if imported under the actual user condition, and any concerns regarding violation of such conditions could be addressed separately.

In conclusion, the Tribunal found no merit in the Revenue's case and rejected the appeal, affirming the importer's right to the refund based on the fulfillment of conditions specified in the notification. The judgment underscored the importance of adhering to the specific conditions outlined in notifications for claiming refunds and clarified that the sale of imported goods with VAT payment did not automatically disqualify the importer from receiving the refund of SAD.