2019 (2) TMI 497 – CESTAT HYDERABAD – TMI – Refund of SAD – N/N. 102/2007-Cus dated 14.09.2007 – applicable rate of VAT is Nil – sale of imported goods on payment of nil rate of VAT – Held that:- On identical issue the principal Bench of Tribunal in the case of Gazal Overseas [2015 (12) TMI 427 – CESTAT NEW DELHI] relying on the CBEC circular No. 06/2008 dated 28.04.2008 (which binding on the Departmental officers) held that the SAD refund is available even when the appropriate rate of VAT payable is nil – refund allowed – appeal dismissed – decided against Revenue. – Appeal Nos. C/31010 & 31099/2018 – A/31557-31558/2018 – Dated:- 6-11-2018 – Mr. P. Venkata Subba Rao, Member (Technical) Shri V.R. Pavan Kumar, Shri Guna Ranjan, Superintendent (ARs) for the Appellant (s). None for the Respondent (s). ORDER Per: P. Venkata Subba Rao These two appeals and the corresponding stay petitions have been filed by the Revenue against the impugned orders of the First Appellate Authority as follows
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subject to VAT at the time of import, SAD is levied on them so as to provide a level playing field to domestic producers of the goods. However, after importing the goods, if the importer sells them on payment of appropriate VAT/sales tax, they are entitled to the refund of the SAD in terms of Notification No. 102/2007-Cus dated 14.09.2007. While the rate of SAD unit is 4%, to claim SAD refund VAT as applicable for the goods in question has to be paid which could be more or less than 4%. In this case the respondent s goods were exempted from VAT and as such nil rate of duty VAT was applicable and they had sold the goods and claimed refund of SAD. The refund applications were rejected by the lower authority holding that they had not fulfilled the conditions of the Notification No. 102/2007-Cus dated 14.09.2007 inasmuch as they had not paid any VAT or sales tax on the goods sold and therefore the exemption notification does not apply to them. 4. Aggrieved, the respondent herein preferred
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the word appropriate with respect to tax does not nil therefore in the case in hand the nil rate of VAT should not be considered as appropriate rate of VAT paid. ii) The Hon ble Tribunal while deciding the case of Gazal Overseas had not considered the judgment of the Hon ble Supreme Court in the case of Dhiren Chemical Industries (supra). In the case of Nikhil Kumar Vs. Commissioner of Customs [2005 (187) ELT 6 (Cal.)] the Hon ble High Court of Calcutta also held that the term appropriate does not include nil . iii) Even, if more than one interpretation is possible the exemption notification must be strictly construed and therefore the benefit of the exemption notification No. 102/2007 should not have been given to the respondent herein. Therefore the orders of the first appellate authority may be set aside. 6. I have considered the arguments and perused the records. The short point to be decided is whether the benefit of SAD in terms of Notification No. 102/2007-Cus is available to im
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