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TMI Blog2018 (1) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Akhil Suresh, Advocate Ms. K.Nancy, Advocate Shri Senthilnathan, Consultant For the Appellant Shri A. Cletus, ADC (AR) Shri R. Subramanian, AC (AR) For the Respondent ORDER Per Bench The common issue involved in all these appeals is that the claim for refund of SAD under Notification No.102/2007-Cus. as amended was disallowed by the lower authorities on the ground that no VAT/CST was paid against the imported goods at the time of sale, hence condition 2(d) was not fulfilled on the ground that refund is eligible only importer has paid appropriate VAT for the sale invoices and in the said case, since impugned gods were exempted, the question of payment of VAT/CST does not arise. 2. Today, when the matter came up for hearing, on behalf of the appellants, Ld. Advocates/consultant submitted that the issue involved in these appeals have been settled by the Tribunal in Kubota Agricultural Machinery India Pvt. Ltd. and Acer India Pvt. Ltd. Vs CC Chennai-IV as reported in 2017 (6) TMI 565-CESTAT Chennai which laid down that, if the appropriate rate of Sales Tax/VAT was Nil, then the appropr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 of import duties. Many Hon ble Members have also written to me expressing their concern on the general health of the domestic industry. The demands are diverse and asymmetrical in most case. This is for obvious reasons. While the users of imported raw materials and other inputs or the consumers of finished imported goods would benefit from further reduction in import duties, the domestic producers have made a convincing case for urgent relief to the domestic industry. 121. I have given my earnest consideration to these concerns and the competing claims. I am persuaded about a clear disability that our commodity taxation inflicts on the indigenous goods vis-`-vis the imported goods. While the former are subjected to sales tax and other local taxes and levies, the import sector, escapes them by their very nature. In order to provide a level playing-field to the domestic industry, I propose to impose an additional non-modvatable levy of 8% on imports whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 answered is whether for the purpose of 2(d) of the above Notification, whether such Nil rate of sales tax / VAT/CST can be considered as appropriate duty . 6.7 We find that the Tribunal s decision relied upon by the learned counsel has answered this question in a very convincing manner in the case of Gazal Overseas (supra) . The following relevant portions of the said decision makes for illuminating reading:- 4. We have considered the contention of ld. DR and also perused the refund papers. Notification No. 102/2007, dated 14-9-2007 as amended allowed refund of SAD subject to the condition that the importer shall pay appropriate sales tax or VAT, as the case may be. In the present case, the appropriate sales tax or VAT being NIL the appellants cannot be said to have violated the said conditions of the said notification inasmuch as it cannot be said that they have not paid appropriate sales tax/VAT. In this regard, it is seen that vide Circular No.6/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, 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 duty at the rate of fifteen per cent ad valorem. It is in the above circumstances that the Court held, on the basis of Section 3 and Rule 9A, that though the goods were produced or manufactured prior to March 1, 1987, still they attracted duty at the rate prevailing on the date of their removal, i.e., fifteen per cent. Para-7 clearly brings out the ratio of the said decision. The relevant portion in Para 7 reads: Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for administrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under Rule 9A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnata ..... X X X X Extracts X X X X X X X X Extracts X X X X
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