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2021 (4) TMI 1182 - AT - CustomsRefund of SAD - rejection on the ground that the appellant has neither paid VAT nor CST on the imported goods - benefit of exemption of CST on the goods imported availed - HELD THAT - Issue decided in the case of 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 where it was held that When goods imported are otherwise, not fully exempted from VAT/sales tax, non-refund of 4% SAD paid on the concerned importers at the stage of import of these goods would amount to unintended taxation and uncalled for discrimination against the importer for no fault of theirs. The rejection of refund claim is unjustified - appeal allowed - decided in favor of appellant.
Issues Involved:
- Eligibility for Special Additional Duty (SAD) refund when exempted from paying Central Sales Tax (CST) on imported goods. Detailed Analysis: Issue: Eligibility for SAD refund when exempted from paying CST on imported goods The case involved the appellant who imported laptop computers, cleared the goods by paying Special Additional Duty (SAD), and later sold them to educational institutions without paying sales tax as the transaction qualified as a sale in the course of import exempted from CST under Section 5(2) of the CST Act. The appellant filed a refund claim for the SAD paid during the relevant period, which was rejected on the grounds of not paying VAT or CST on the imported goods. The Commissioner (Appeals) upheld the rejection, leading to the current appeal. During the proceedings, the appellant's counsel argued that the appellant was exempted from paying CST on the imported goods under the CST Act, making them eligible for the SAD refund. The counsel relied on a previous decision in the appellant's own case that supported the eligibility for SAD refund even if VAT/CST was at a Nil rate. The Tribunal analyzed the issue based on previous decisions and clarifications from Circular No. 6/2008, emphasizing that the refund of SAD was subject to the condition of paying appropriate sales tax or VAT, regardless of the rate. The Tribunal highlighted that if the appropriate VAT/sales tax was NIL, the refund would still be admissible as long as it was paid. The Tribunal also referenced relevant Supreme Court judgments to support the interpretation that nil rate is also considered an appropriate duty. In conclusion, the Tribunal found merit in the appellant's contention and set aside the rejection of the refund claim, allowing the appeals with consequential relief as per the law. The decision was based on the interpretation that as long as appropriate sales tax/VAT was paid, the SAD refund was admissible, even if the rate of VAT/sales tax was Nil. The Tribunal's decision was supported by previous case law and clarifications, ensuring that the appellant was eligible for the SAD refund despite being exempted from paying CST on the imported goods. This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI provides a comprehensive overview of the issues involved and the Tribunal's decision regarding the eligibility for SAD refund in cases where CST on imported goods is exempted.
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