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TMI Blog2019 (4) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... se order is inclusive of all taxes duties and the respondent has passed on the incidence of VAT to the buyer and there has been unjust enrichment - HELD THAT:- The unjust enrichment in the instant case would apply only if the Respondents would have passed the incidence of 4% SAD paid by them and not the element of VAT levied and recovered by the importer from their buyer as part of their subsequent sale of such goods. Para 2 (vii) of Circular 16/2008 issued by the Board clear states that the intention of the Government is not to allow the importer to recover 4% SAD from the buyer and to claim the refund from Customs as well and that the only method to ensure this is to make it conditional to satisfy the principal of unjust enrichment. The recovery of VAT by the Respondent on subsequent sale does not casts any effect on exemption from SAD as the unjust enrichment would apply only if the Claimant recovers the SAD amount from buyers. The Appellate Authority has also examined the issue as to whether the Respondent has passed on the SAD Component to their buyer whether it pertains to passing on SAD component to the buyers. He has observed that none of the sales invoices were issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2011/CR 452/NRG-4 dated 8.12.2011 No. CUM-2011/CR 359/NRG-4 dt 21.10.2011, CUM-2011/CR 394/NRG-4 dated 31.10.2011 Cl-2011/CR 453 /NRG-4 dated 8.12.2011. As per the recommendation letter, buyer was setting up a 765 KV 400 KV substations including all equipments, Auto Transformers and Reactors associated with 765 KV Tiroda Karadi III Akola II Aurangabad Transmission System in Maharashtra. The contract dated 27.9.2010 made by the Respondent with the buyer was registered by M/s Maharashtra Eastern Grid Power Transmission Co. Ltd with the Custom House, Kandla vide Registration Letter No. S/42-38/MEGPTEL-Projects/Gr.VI/2011 dated 01.11.2011 issued by the Assistant Commissioner of Customs, Customs House, Kandla. 3. The imported goods were granted benefits of Project Import and were imported by the Respondent inclusive of SAD / CVD. They later filed claim for refund of 4% SAD /CVD on the imported goods under the provisions of Notification No. 102/2007-CUS dated 14.9.2007 on the ground that they have paid VAT / CST on such imported goods. The refund claim for the amount of ₹ 15,82,53,825/- was sanctioned to them vide OIO dated 28.05.2013. The Revenue against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rine of unjust enrichment is applicable. The Respondent has availed double benefit. The copy of invoice of Respondent are not co-related with import document as the invoice of Respondent does not mention the reference of Bill of Entry No., BL No., Invoice No. under which the goods were imported and paid 4% SAD and thus the condition of the notification no. 102/2007 is not fulfilled. The value shown in Bill of Entry and value shown in invoice does not match. The invoice does not bear remark whether the goods imported and on which 4% SAD has been paid, has been sold. The sanction of refund without obtaining proper explanation from Respondent and without taking on record the co-relation of import goods is improper. The Notification No. 102/2007 dated. 14.09.2007 exempts the goods when imported into India for subsequent sale whereas in instant case the goods are imported for specific end use for a power project and sale if any is a subsequent/ unwarranted even created by the importer to avail ineligible SAD Refund. The goods were imported in capacity of EPC Contractor and the purported sale was only on paper. Once the goods have been installed and the project commissioned, the identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D if the imported goods are subsequently sold and they have suffered VAT/ CST. We agree with the views of the Appellate Commissioner that the provision of one statute i.e. Project Regulations cannot be imported into the provisions of Notification No. 102/2007-Cus to interpret and deny the exemption/ refund of SAD. Once the assessee has paid CST/ VAT on sale of imported goods, there is no question of retaining the 4% SAD as the payment of such CST/ VAT is the only criteria for granting refund. The adjudicating and the Appellate authority have found from the records that the imported goods on which SAD was paid have been sold by the Respondent to their buyer on further payment of VAT/CST and in such case we do not find any reason to deny refund on the ground that the goods were part of Project contract and has lost their identity. The tribunal in case of Reliance Communication Infrastructure Ltd. 2012 (279) ELT 85 has held as under: 5. We have carefully considered the submissions from both the sides and perused the records. In this case, there is no dispute that the Set Top Boxes have been imported by the respondent for supply to their consumers on right to use basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, by the importer, on sale of such imported goods . 6. Thus, from the perusal of the notification, it is clear that for refund of SAD the main conditions to be satisfied are (a) The goods have been imported for sale; (b) On sale of the goods, appropriate sales tax or VAT has been paid; and (c) The sales invoices specifically indicate that no credit of the SAD paid under Section 3(5) of the Customs Tariff Act, 1975 shall be admissible . 7. The main purpose of the exemption is that the same goods should not suffer SAD as well as VAT/Sales Tax. Though the word sale has not been defined in this notification, it is clear that the word sale must be understood in the sense in which it has been defined in sales tax/VAT Acts of various State Governments or Central Tax Acts, 1956 and in these Acts the word sale also includes transfer of right to use any goods for any purpose (whether or not for a specified period) for cash or deferred payment or other valuable consideration. In this case, there is no dispute that the imported Set Top boxes have been supplied by the respondent to their consume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods has been transferred to the buyer by way of subsequent sale of such goods under the cover of sales invoices, for which they have received payment from the buyer on pro-rata basis, as per the terms of purchase order. It shows that the Respondent also acted as supplier of all impugned equipment / goods by virtue of Section 2 (9) of the CST Act which states that a sale of goods is transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration and includes a transfer of goods on the hire purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge of pledge on goods. From the above definition, it clearly transpires that there has been transfer of imported goods from the Respondent to the buyer. Even though the purchase order, i.e. EPC Contract is having composite contract value but the sales invoices issued by the Respondent included the sale value at which the imported goods were sold to the buyers. The Ld. Counsel appearing for the Respondent has relied upon the judgment of Hon'ble Apex Court in case of Rajasthan Chemists Association 2006 (202) ELT 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect on exemption from SAD as the unjust enrichment would apply only if the Claimant recovers the SAD amount from buyers. The Appellate Authority has also examined the issue as to whether the Respondent has passed on the SAD Component to their buyer whether it pertains to passing on SAD component to the buyers. He has observed that none of the sales invoices were issued by the Respondent under rule 11 of the Central Excise Rules to enable the buyer to avail cenvat credit nor the invoices indicate the SAD component separately as available credit. That each invoice carry a declaration regarding non-eligibility of Cenvat Credit and thus compliance to the conditions specified under para 2 (b) of the subject notification was made. He also found that there was no prospect of subsuming the SAD component into the value charged by the Respondent in their sales invoices as such sales value (including CST amount) is much lower as compared to the total purchase value of goods (excluding SAD component) and the refund claim is supported with collateral evidences in the form of a certificate issued by their statutory auditors which certified that the respondent has not passed on the SAD componen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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