2017 (10) TMI 1070 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus. dated 14.09.2007 - denial on the ground that the VAT/Sales Tax applicable on the products so sold by the assessee was nil/zero and as such it cannot be said the appropriate tax was paid on the subsequent sale so as to entitle the appellants for refund of SAD - Held that - the appellants would be entitled to the refund of SAD paid at the time of import of the goods, on their subsequent sale, even if the vat or sales tax rate was NIL - reliance placed in the appellant s own case M/s. Kubota Agriculturall Machinery India Pvt. Ltd. And M/s. Acer India Pvt. Ltd. Versus Commissioner of Customs, Chennai-IV 2017 (6) TMI 565 - CESTAT CHENNAI - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Appeal dismissal due to non-appearance, recall of order based on non-receipt of notice, denial of refund of SAD based on zero VAT/Sales Tax rate.

Issue 1: Appeal dismissal due to non-appearance
The appellant's appeal was dismissed ex-parte as they failed to appear on the hearing date. The appellant's advocate explained that the appellant did not receive the notice on time, citing a previous Tribunal decision in a similar case. The advocate requested to recall the order based on the Supreme Court's decision in J.K. Synthetics Ltd. Vs. Collector of Central Excise. The Tribunal, after considering the arguments, decided to recall the order and proceed with the appeal.

Issue 2: Recall of order based on non-receipt of notice
The appellant's non-appearance was attributed to not receiving the notice on time. The advocate argued that the issue had been addressed in previous Tribunal decisions and requested the order to be recalled based on legal precedents. The Tribunal, after hearing both sides, recalled the order and proceeded to decide the appeal along with other related appeals.

Issue 3: Denial of refund of SAD based on zero VAT/Sales Tax rate
The main issue in all appeals was the refund of Special Additional Duty (SAD) paid during import, under Notification No.102/2007-Cus. The Revenue denied the refund citing zero VAT/Sales Tax on subsequent sales, arguing that no appropriate tax was paid. However, previous Tribunal decisions, including Gazal Overseas, held that even a nil VAT/Sales Tax rate constitutes an appropriate payment. Following this precedent, the Tribunal allowed the appeals, stating that the appellants were entitled to the refund of SAD paid during import, regardless of the zero tax rate on subsequent sales.

In conclusion, the Tribunal recalled the ex-parte order due to non-receipt of notice, and allowed the appeals related to the refund of SAD despite zero VAT/Sales Tax rates on subsequent sales, based on established legal precedents.