2018 (11) TMI 933 - AT - Customs

Refund of SAD - rejection on the ground that appellant have cleared the goods on payment of VAT and the VAT rate is NIL as applicable to the goods - Held that - In the case of Malhotra Imports & Exports Corporation 2017 (7) TMI 1113 - CESTAT CHENNAI the Tribunal has come to the conclusion that SAD refund is payable even if no VAT is chargeable on the goods which were sold - same view is taken in the case of CBEC Circular No. 6/2008 dated 28.04.2008 - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Refund of Special Additional Duty (SAD) under Notification No. 102/2007-CUS when goods are cleared on payment of nil rate of VAT.

Analysis:
1. Issue 1 - C/30788/2018:
- The appellant claimed SAD refund, but the lower authority rejected part of the refund due to not fulfilling conditions of the notification as goods were cleared with nil rate of VAT.
- The first appellate authority modified the order and sanctioned the rejected refund, leading to the revenue's appeal.
- The first appellate authority relied on the Tribunal's decision in Gazal Overseas case, stating nil rate of VAT is considered VAT paid.
- The revenue argued that the Supreme Court's ruling in Dhiren Chemical Industries case should apply, asserting nil rate of VAT does not qualify as payment of excise duty.
- The Circular No. 6/2008 clarified that any rate of VAT, including nil, is sufficient for SAD refund, supported by the Tribunal's decision in Malhotra Imports case.

2. Issue 2 - C/30789/2018:
- The lower authority sanctioned SAD refund to the assessee, leading to the revenue's appeal.
- The first appellate authority upheld the lower authority's decision based on the Tribunal's Gazal Overseas case.
- The revenue contended that the same reasoning as in C/30788/2018 should apply, emphasizing the inappropriate nature of nil rate of VAT for SAD refund eligibility.
- The Circular No. 6/2008 and the Tribunal's decision in Malhotra Imports supported the acceptance of nil rate of VAT as VAT paid for SAD refund purposes.

3. Judgment:
- The Tribunal considered arguments from both sides and reviewed precedents like Gazal Overseas and Dhiren Chemical Industries cases.
- The Tribunal concluded that SAD refund is available even if no VAT is charged on goods sold, supported by the CBEC Circular No. 6/2008.
- The appeals by the revenue were rejected based on the Tribunal's interpretation and the circular's guidance, affirming the eligibility of SAD refund despite nil rate of VAT payment.
- The decision rendered the stay applications irrelevant and disposed of them accordingly.