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2019 (10) TMI 180 - AT - CustomsRefund of SAD - N/N. 102/2007 Cus dated 14.09.2007 - whether in a case where the goods are imported by the assessee after paying Special Additional Duty of customs @ 4% and sold thereafter under a tax/VAT invoice but where the rate of VAT applicable is ‘nil’ , the appellant is entitled to refund of SAD paid under N/N. 102/2007-Cus or otherwise? HELD THAT:- When the imported goods are subsequently sold, such sale brings the imported goods at par with the domestic goods because both suffer the same rate of VAT. Therefore, the SAD which is levied is refundable as per the Notification No. 102/2007 Cus. This parity between the imported goods and the domestic goods when the imported goods are sold does not change with the rate of VAT. The exemption notification nowhere specifies the rate at which VAT on the imported goods to be paid when the goods are subsequently sold. While the SAD is uniformly levied at 4%, the applicable VAT on such goods could be high say, 12% or low say 0%. The notification does not make a distinction between these cases on the basis of the rate of VAT applicable on the goods. Similarly, the rate of SAD is only 4% regardless of the exact rate of VAT applicable to the goods. The refund under N/N. 102/2007-Cus only requires the appropriate amount of VAT to be paid after selling the goods. It does not indicate any specific rate of VAT. Therefore if the appropriate rate of VAT is ‘nil’ sale of goods on payment of ‘nil’ rate of VAT amounts to paying appropriate amount of VAT. The issue is no longer res integra and refund of SAD under N/N. 102/2007-Cus is available even if the appropriate rate of VAT is ‘nil’ - Appeal allowed - decided in favor of appellant.
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