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TMI Blog2025 (1) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... us conditions including payment of VAT in respect of said goods. Therefore, if the wordings used in notification are read conjointly, it would be obvious that the notification is applicable only when the imported goods itself is sold and at the time of said sale appropriate sales tax are also paid. Admittedly, the word as such has not been mentioned in the notification, but strict interpretation of this notification having regard to the wordings used would indicate that the exemption is available only when the goods are sold as such and not after certain processing. In AGARWALLA TIMBERS (P) LTD., MITTAL TIMBERS PRODUCTS (P) LTD., VARIETY LUMBERS (P) LTD. AND ASHIRWAD IMPEX (P) LTD. VERSUS CC [ 2013 (11) TMI 1013 - GUJARAT HIGH COURT] , in a given factual matrix, it was held that cutting of log/timber into smaller pieces does not bring into account any new product nor identity of original timber has underwent any fundamental change. They also took into account that as per the Statutory conditions, the importer/transporter cannot carry the logs of length more than 40 feet and therefore having regards to these submissions, a view was taken. These facts are clearly distinguished in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is an admitted fact that the appellants were engaged in two activities namely import of raw cashew nuts and selling it as such and also import of raw cashew nut and converting it into cashew kernel and selling manufactured cashew kernel. While, in the case of first category, the refund of SAD was fully allowed by Department, whereas, in the case of second category, it was felt that as raw cashew nut and cashew kernel are classifiable under two different headings namely 08013100 and 08013210/ 08013220 and since the imported goods and goods sold after processing/manufacturing were not the same, the conditions of Notification No. 102/2007-Cus were not met and in view of the same, the refunds were rejected. 4. In the impugned order, Commissioner (Appeals) has examined the provisions of Notification No. 102/2007-Cus and also Circular No. 15/2010- Cus dated 29.06.2010 and Circular No. 34/2010-Cus dated 15.09.2010 and came to the conclusion based on data of cashew nut processing mainly available on internet site of UNIDO, that the cashew nut imported was being processed through various stages to obtain the end product i.e. cashew kernel and therefore, it would tantamount to processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the Department is providing clarification beyond its jurisdiction, and therefore in view of the judgment of Hon ble High Court of Telangana, the refund is admissible even when there is a change in CTH and the imported goods are not sold as such and that the product does not lose its essential character. 6. Learned Advocate has also relied, interalia, on the order passed by Coordinate Bench in their own case [2018 TMI 1099 (Cestat-Chennai)] wherein the Bench held that they would be eligible for refund. 7. Per contra, Learned AR, apart from reiterating the grounds taken in the impugned order, submits that since the appellants are seeking notificational benefit, it has to be strictly interpreted in view of the judgment of Hon ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai Vs M/s Dilip Kumar and Company Others [2018 (7) TMI 1826 SC]. He has also relied on the following judgments in support that the benefit of Notification No. 102/2007-Cus would not be admissible in the facts of the case: i) Proflex System Vs Commissioner of Customs [2017 (3) TMI 216 Gujarat HC] as upheld by Supreme Court [2017 (8) TMI 93 SC] ii) Seven Hills Solvents Pvt Ltd., Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peruse the Notification No. 102/2007-Cus, which is reproduced below for the ease of reference: i) Notification No. 102/2007-Customs Dated 14.09.2007: Special CVD Exemption to all goods when imported for subsequent sale. In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for subsequent sale, from the whole of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act (hereinafter referred to as the said additional duty). 2. The exemption contained in this notification shall be given effect if the following conditions are fulfilled: (a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods; (emphasis supplied) (b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulating the facts of the imported goods being sold as such and the modus operandi was brought to the notice of the field formations highlighting that there is distinguished difference in timber logs and sole/ cut logs . Similarly, Circular No. 34/2010 also clarifies certain position with regard to Notification No. 102/2007, which are also otherwise apparent on plain reading. Therefore, Department has not solely relied on circulars per se but has analysed the provisions contained in the relevant notification under which refund has been claimed by the appellant. 12. Coming to the judgments relied upon by the Learned Advocate, We find that in the order in their own case by the CESTAT Co-ordinate Bench, Chennai, the Tribunal has mainly relied on M/s Kanam Latex Industries (P) Ltd., Final Order No. 40860-40861/2018 dated 16.03.2018 and Anothers as also on judgment in the case of Milak Brothers Vs Union of India [1990 (10) TMI 74 (SC)] and also observed that both cashew nut and cashew kernels are classified under the same headings 0801. As pointed out by Learned AR, this judgment has not taken into consideration, the judgment of the Hon ble Supreme Court in the case of Vijaya Laxmi Cashe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. Hence, the Hon ble High Court after going through the facts of the case, where the identical notification i.e. 102/2007-Cus was involved, held at para 6.1 that for claiming refund under said notification, the importer has to specify that Value Added Tax/ Service Tax as the case may be has been paid on the goods imported and only those goods imported are sold and the VAT is paid on such imported goods. Reliance is also placed on Seven Hills Solvents Pvt Ltd., Vs CCT (supra) by CESTAT, Hyderabad. 15. Learned Advocate has also tried to raise certain additional issues regarding liberal interpretation and that State cannot be enriched at the cost of manufacturers by way of taxation etc. We do not find these arguments tenable, in view of the fact in the scheme of things, as is also apparent from the Hon ble Finance Minister s speech before the introduction of the notification, that the SAD was intended to be imposed for level playing field between importer and local seller. Therefore, when the goods were imported for re-sale on which the VAT has been paid, earlier CVD/SAD collected at the time of import were returned by way of refund, to avoid double taxation. However, when the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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