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2019 (4) TMI 1712 - AT - CustomsRefund of SAD - Denial on the ground that they have paid VAT / CST on such imported goods - N/N. 102/2007-CUS dated 14.9.2007 - HELD THAT:- The notification in question provides for exemption/refund of SAD if the imported goods are subsequently sold and they have suffered VAT/ CST - 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, there is no reason to deny refund on the ground that the goods were part of Project contract and has lost their identity. Unjust enrichment - The Revenue has argued that the price indicated in the purchase 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 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. Appeal dismissed - decided against Revenue.
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