2017 (10) TMI 1069 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus. dt. 14.09.2007 - denial on the ground that since they have claimed Sales Tax/VAT exemption notification for sale of goods in U.P. State, condition No.2 (d) of the notification is not fulfilled - Held that - for the purposes of Condition No.2 (d) of the N/N. 102/2007 Sales Tax has been paid at appropriate rate for the purpose of condition No.2 (d) and Nil rate of Sales Tax/ VAT, CST is to be considered as appropriate duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on conditions of Notification No.102/2007-Cus., validity of rejection on grounds of CA certificate, sales invoices, and VAT exemption fulfillment.

Analysis:
The appellant filed a refund claim under Notification No.102/2007-Cus. for Special Additional Duty of Customs. The original authority rejected the claim citing non-compliance with various conditions, including the absence of an abstract and correlation sheet in the CA certificate, missing appointment letter of CA, and non-submission of VAT/CST returns. Additionally, sales invoices lacked mandatory endorsements as per the notification's requirement, and the claim was challenged due to the appellant's utilization of Sales Tax/VAT exemption for goods sold in U.P. State. The lower appellate authority upheld the rejection based on the third ground but found the first ground unsustainable.

During the hearing, the appellant's counsel referenced a Tribunal decision, Final Order Nos.40889-40898/2017, to support their case. The Tribunal examined the issue and referred to various Supreme Court judgments like Vazir Sultan Tobacco Co. Ltd. and subsequent decisions, emphasizing the intention to prevent double jeopardy to importers regarding SAD payments. The Tribunal ruled in favor of the appellants, stating that if they demonstrated the discharge of appropriate sales tax/VAT for the imported goods, the refund under the notification could not be denied. The Tribunal also highlighted the importance of correlating VAT/Sales Tax with the goods sold and the CA certificate, ultimately allowing the appeal and setting aside the impugned orders.

The Tribunal unequivocally held that for Condition No.2 (d) of Notification No.102/2007, payment of Sales Tax at the appropriate rate suffices, and nil rate of Sales Tax/VAT, CST should be considered as appropriate duty. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law. The decision emphasized the need to align with the Tribunal's ratio and established legal principles to ensure fair treatment of importers regarding tax liabilities and refund claims.

This comprehensive analysis of the judgment showcases the meticulous consideration of legal provisions, precedents, and factual circumstances to arrive at a just and reasoned decision benefiting the appellant in the context of the refund claim under scrutiny.