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TMI Blog2017 (6) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. - C/41260 & 42465/2015 and C/40592 to 40596/2016 and C/40598 & 40599/2016, C/40556/2016 - 40889-40898/2017 - Dated:- 2-6-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri S. Muthuvenkataraman Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent ORDER Per Bench The core issue in all these appeals being identical, they are taken up together for common disposal. In the appeals filed by M/s. Kubota Agricultural Machinery India Pvt. Ltd, the appellants therein had approached the Hon ble High Court of Madras in W.P. No.17236 of 2016 seeking direction for early disposal of the appeals pending before CESTAT. The Hon ble High Court vide their order dated 4.5.2016 directed CESTAT to dispose of the appeals as early as possible, preferably within a period of four months. Hence these appeals are being taken up out of turn for disposal. In respect of Appeal No.C/40556/2016 in the case of M/s. Acer India Pvt. Ltd., this Bench vide Misc. Order No.40143/2017 dated 23.3.2017 had directed that the said appeal should be listed along with other matters in the issue of refund of additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is in very small compass on the matter namely whether appropriate sales tax / VAT has been paid at the appropriate rate for the purposes of 2(d) Notification. At the outset, learned counsel drew our attention to section 3(5) of the Customs Tariff Act, 1975 to point out that SAD has been imposed only to counter balance the sales tax/VAT and local tax or any other charges for the time being leviable on a like article on its sale, purchase, transportation in India. Therefore, when VAT / CST is not imposable on the goods imported, there should be no reason to deny the refund of SAD paid on the imported goods. He submits that the reliance of the lower appellate authority on the ratio of the Hon ble Supreme Court in the case of Collector of Central Excise Vs. Dhiren Chemicals Industries as reported in 2002 (139) ELT 3 (SC) is misplaced. According to the learned counsel, the Hon ble Supreme Court in that matter was considering whether the phrase appropriate duty has been paid in the light of a notification which exempted payment of duty on final product which imposed a condition that 'appropriate duty has been paid on the raw materials' used in the manufacture. He submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le as specified in that notification. Explanation . In this sub-section, the expression sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India means the sales tax, value added tax, local tax or other charges for the time being in force, which would be leviable on a like article if sold, purchased or transported in India or, if a like article is not so sold, purchased or transported, which would be leviable on the class or description of articles to which the imported article belongs and where such taxes, or as the case may be, such charges are leviable at different rates, the highest such tax or, as the case may be, such charge. 6.2 It is evidently clear that the Notification of the Legislature is to counter balance element of sales tax / VAT etc. leviable on a like article purchased or transported into India. 6.3 The SAD was introduced in the year 1998. The intention of its imposition was brought out in the Finance Minister's Budget Speech in Parliament as follows:- 120. I have received representations from a cross section of the industry about the regime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed on corresponding domestic goods. For the present, I propose to levy a CVD of 4 per cent only on the imports of ITA bound items and their inputs that attract nil duty. Credit for the CVD will be available against payment of excise duty. However, because we have a soft corner for these wares, IT software will be exempt from the proposed CVD. 6.5 Thus, the intention of the Legislature in imposing SAD was to neutralize the clear disparity that commodity taxation inflates the end cost of the indigenous goods vis-a-vis the identical goods when imported. This intention of the Legislature is manifested in the inclusion of the term counter balance in section 3(5) ibid. As seen above, at the time of its introduction, the Finance Minister informed Parliament that the said imposition was to bring about a level playing field in the domestic industry. Thus, the essence of SAD is to counter balance the landed cost of the imports so as to factor in sales tax, VAT etc. that would be suffered by other indigenous goods, domestically manufactured within the country. 6.6 However, in both the appeals, imported goods suffer nil rate of VAT/Sales Tax. The question that has to be answer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of sales tax/VAT was NIL then the appropriate sales tax/VAT paid will also be NIL. 6.8 We further find merit in the contention of the learned counsel that the judgment of the Hon ble Supreme Court in the case of Dhiren Chemical Industries (supra) was on a totally different issue. It is seen that the said judgment pertains to exemption claimed by the respondents therein on the premise that raw materials were also exempt. On the other hand, we find that the Hon ble Supreme Court, in the case of Vazir Sultan Tobacco Co. Ltd. - 1996 (83) ELT 3 (SC) has clearly held that nil rate is also an appropriate duty. The relevant portion of the Apex Court judgment is reproduced herein:- 12. In our opinion, the decision in Wallace Flour Mills does not lay down a contrary proposition - neither does it support the contention of Sri Vellapally. That was a case where the goods were excisable goods prior to March 1, 1987, though by virtue of an exemption notification, the rate of duty was nil. This does not mean that they were not excisable goods. They were excisable goods. Nil rate of duty is also a rate of duty. With effect from March 1, 1987, the said goods became excisable to du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile it was intended to level playing field to the indigenous manufacturers, there certainly was no intention to cause double jeopardy to any importer. 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. 7. In view of the discussion herein above and also following the ratios laid down by the Hon ble Supreme Court in Vazir Sultan Tobacco Co. Ltd. and subsequent judgments cited supra and also the ratio of the Tribunal in Gazal Overseas (supra) , the appeals filed by the appellants above succeed. It is held that the appellant have discharged appropriate sales tax / VAT for the sale of the goods imported by them. As such the refund claimed by them under Notification No.102/2007-Cus. cannot be denied to them, as long as the appellants are able to establish that nil VAT/Sales Tax was required to be discharged on the impugned goods. With regard to the mismatch of documents alleged, we find on perusal of records that the adjudicating authority has correlated VA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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