2019 (2) TMI 497 - AT - Customs

Refund of SAD - N/N. 102/2007-Cus dated 14.09.2007 - applicable rate of VAT is Nil - sale of imported goods on payment of nil rate of VAT - Held that - On identical issue the principal Bench of Tribunal in the case of Gazal Overseas 2015 (12) TMI 427 - CESTAT NEW DELHI relying on the CBEC circular No. 06/2008 dated 28.04.2008 (which binding on the Departmental officers) held that the SAD refund is available even when the appropriate rate of VAT payable is nil - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against impugned orders of First Appellate Authority regarding refund of Special Additional Duty of Customs (SAD) under Notification No. 102/2007-Cus dated 14.09.2007 based on payment of nil rate of VAT.

Analysis:

Issue 1: Refund of SAD based on nil rate of VAT
The case involved appeals by the Revenue against the First Appellate Authority's decision on refund applications for SAD under Notification No. 102/2007-Cus dated 14.09.2007. The issue was whether importers selling goods with nil rate of VAT are eligible for SAD refund. The Department argued that nil VAT does not fulfill the conditions of the notification, while the First Appellate Authority allowed the appeals. The Department contended that nil VAT does not constitute appropriate VAT, citing precedents. However, the First Appellate Authority relied on the Tribunal's decision in Gazal Overseas case and upheld the refund. The Tribunal found no error in the Authority's decision, citing binding CBEC circular and precedent cases supporting SAD refund even with nil VAT.

Conclusion:
The Tribunal rejected the appeals and upheld the orders of the First Appellate Authority, stating that the benefit of Notification No. 102/2007-Cus is available even if the applicable VAT is nil. The decision was based on precedent cases and a CBEC circular, affirming that the appropriate VAT rate does not need to be paid for claiming SAD refund.