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Commissioner of Customs, Kandla Versus M/s. Luna Infraprop Pvt. Ltd.

2015 (9) TMI 1014 - CESTAT AHMEDABAD

Refund of SAD / Additional Duty - Validity of Sale transaction Entitlement of Exemption benefit Adjudicating authority sanctioned refund claim of 4% additional duty Commissioner (Appeals) dismissed appeal against Adjudication order on ground that refund sanctioned was not in violation of condition of Notification No.102/2007-Cus as Respondents had made sale transactions only on paper Held that:- from agreement to supply it was clear that Respondents passed title of goods and certificates .....

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5 (8) TMI 121 - SUPREME COURT OF INDIA] held that eligibility to exemption determined by prescribed method should not be denied based on other criteria No dispute that Respondents paid additional duty of customs and also paid VAT therefore, benefit of exemption notification cannot be denied Decided against revenue. - Appeal No. C/11025/2014-DB; C/Cross/13352/2014 - Order No. A/10532 / 2015 - Dated:- 7-5-2015 - Hon ble Mr. P.K. Das, Member (Judicial) And Hon ble Mr. H.K. Thakur, Member (Techn .....

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contractor through International Competition Bidding process, agreed to do erection, procurement and commissioning of the said plant. The Respondents imported a consignment described as Gas Turbine and Generator Unit & MSD Unit 1 & 2, Lubricants, Inlet Support/Steel Structure paid additional duty of customs (4% CVD) as per Section 3(5) of the Customs Tariff Act, 1975 at the time of importation. The goods were sold to M/s GIPL. The Respondents filed refund claim of 4% additional duty of C .....

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the Respondents had made the sale transactions only on paper. By the impugned order, the Commissioner (Appeals) rejected the appeal filed by the Revenue. Hence, the Revenue filed this appeal. 2. The learned Authorised Representative for the Revenue submits that refund of Customs duty is eligible on SAD for sale of the said goods. There was no sale transaction between the Respondents and GIPL. It is revealed from the contract that GIPL entered into contract with foreign suppliers for supply of ma .....

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ue. 3. The learned Counsel on behalf of the Respondent drew the attention of the Bench to the relevant portion of the agreement to establish that the Respondents passed the title of the goods to M/s GIPL by raising invoices. He also placed the certificate issued by the Government of NCT of Delhi, Department of Trade & Taxes, New Delhi, certifying that the Respondents sold the goods to M/s GIPL and paid CST. He further relied upon the various case laws and filed written submissions with compi .....

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on shall be given, 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; (b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Custom .....

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of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods. The jurisdictional customs officer shall sanction the 3. refund on satisfying himself that the conditions referred to in para 2 above, are fulfilled. 5. The main contention of the learned Authorised Representative for the Revenue is that there was no sale of the .....

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ngaged in the business of undertaking procurement of supply of power plant equipment and GIPL desired to purchase certain equipments and materials. The Respondents passed the title of the goods and certificates to the project authority by raising invoices. For the proper appreciation of the case, the relevant portion of the order of Commissioner (Appeal) are reproduced below:- 5.3 The chart clearly reveals that with or without applying FIFO method, CST in respect of Invoice No.329/24.03.2012 was .....

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n the objection raised by the appellant-department in this regard. 6. Appellant-department has also argued that the CA has issued his certificate without verification of records to facilitate the respondent for filing refund claim in time. This was mainly due to the aforesaid allegation that CST was paid only after filing of the refund claim whereas the CA certificate certifies payment of CST beforehand. In view of the factual position discussed supra, appellant-department s argument against the .....

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transit insurance included on the supplies made on CIF basis and all applicable taxes/duties. Further, Article 10.2 which deals with the terms of shipment and title of the equipments, specifies that notwithstanding which party has title, care custody and control of the equipment and loss or damage thereto shall remain with the supplier (respondent) until passed to the buyer at the delivery point. The term delivery point has been defined in Article 1 as any Indian seaport for imports and airport .....

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t corporate. Therefore, buyer assumes no responsibility for early payments for supplies or import duties, which in the aggregate, on a quarterly basis, exceed the cumulative total amounts shown in Appendix B, supplier shall provide the buyer at least 25 (twenty five) days prior notice of such early shipment.... 7.4 Respondent has also submitted that Bank of Baroda has financed the power project of their buyer with a project cost of ₹ 909.18 Crores; that the facilities and finance granted b .....

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bank deputes their engineer to the project site for periodical inspection of all equipments and the progress of the project before disbursing phased installments of the loan. 7.5 A closer scrutiny of all these documents support their submissions made by the respondent that despite their responsibility for implementation of the whole power project till its final stage of commissioning and final running, the title and care custody of each equipment procured for the project has already been transfe .....

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entral Sales Tax Act, 1956. The definition of the term sale as defined under Section 2(g) of the said CST Act states:- sale , with its grammatical variations and cognate expressions, means any 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 installments, but does not include a mortgage or hypothecation of or a charge or pledge on goo .....

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d has no relevance to the admissibility of refund of 4% SAD as provided under Notification No.102/2007 (supra), once details of goods in the BOE and details of goods in the sales match completely. 6. We find that the sales tax authorities accepted the sale of the goods on the basis of invoices and confirmed the payment of CST. It is revealed from the agreement that the title of the goods was transferred to M/s GIPL as soon as the invoices were raised to M/s GIPL. The sale is completed as soon as .....

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It is noted that the sales tax authorities accepted the sale of the goods on the basis of invoices produced by the Respondents. The exemption Notification No.102/2007-Cus stipulates the condition for availing the exemption and determined the prescribed method which were fulfilled by the Respondent. The Hon ble Supreme Court in the case of M/s Vadilal Chemicals Ltd Vs State of Andhra Pradesh 2005 (192) ELT 33 (SC) held that the eligibility to exemption determined by prescribed method should not .....

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tificate. There was no other method prescribed under the scheme for determining an industrial unit s eligibility for the benefits granted. The Department of Industries & Commerce having exercised its mind, and having granted the final eligibility certificate (which was valid at all material times), the Commercial Taxes Department could not go beyond the same. More so when the Commissioner, Sales Tax had accepted the Eligibility Certificate issued to the appellant and had separately notified .....

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