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2018 (2) TMI 1135 - AT - CustomsRefund of SAD - N/N. 102/2007-Cuse dated 14/09/2007 - denial on the ground that appellants have not paid the VAT as they availed VAT exemption - Held that - the issue whether the appellants are eligible for refund when the goods are exempted from levy of sales tax/VAT is settled by the decision of the Tribunal in the case of M/s. Kubota Agricultural Machinery India Pvt. Ltd. 2017 (6) TMI 565 - CESTAT CHENNAI , where Decision in the case of Vazir Sultan Tobacco Co. Ltd. 1996 (2) TMI 138 - SUPREME COURT OF INDIA , followed, where it was held that nil rate is also an appropriate duty - refund allowed - appeal allowed - decided in favor of appellant.
Issues: Refund of Special Additional Duty (SAD) based on VAT exemption under Notification No.102/2007-Cus dated 14/09/2007.
Analysis: The appellants filed refund claims for SAD under Notification No.102/2007-Cus but were partly rejected due to non-payment of VAT as they availed VAT exemption. The Commissioner (Appeals) upheld the rejection. The appellants argued that SAD was levied to balance local taxes on imported goods and that the condition of producing evidence for VAT payment should not apply when goods are VAT exempt. They cited relevant case laws supporting their claim (Gazal Overseas Vs. CC, New Delhi and M/s. Kubota Agricultural Machinery India Pvt Ltd. and M/s. Acer India Pvt. Ltd. Vs. CC, Chennai). The Revenue reiterated the findings of the impugned order, leading to a hearing. The Tribunal referred to the decision in the case of M/s. Kubota Agricultural Machinery India Pvt. Ltd. and Gaxal Overseas to establish that if appropriate VAT/sales tax was paid, SAD refund was admissible even if VAT/sales tax was less than SAD or even nil. The Tribunal clarified that the exemption under the notification did not require VAT/sales tax to be equal to or higher than SAD for refund eligibility. Therefore, the rejection of the refund claim based on VAT exemption was deemed unjustified, and the appeal was allowed with consequential benefits to the appellants.
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