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2019 (10) TMI 180

..... 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 .....

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..... essee 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 Notification No 102/2007-Cus or otherwise. 3. The appellant herein imported goods on payment of appropriate duties of customs including Special Additional Duty @ 4% as applicable. At this stage, it would be profitable to mention that goods which are imported into India are chargeable to a number of duties of customs. Among these is Special Additional Duty of Customs (SAD) which is levied @ 4% on some commodities in order to provide a level playing field for domestic manufacturers. Goods which are manufactured within the country and sold suff .....

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..... 26.09.2002 citing the above judgement of the Hon ble Apex Court and instructing that whenever an exemption is subject to the condition that appropriate duty of excise has been paid on the inputs, the exemption will not be available if the inputs are exempted from excise duty or such duty is nil . Accordingly, the Revenue filed appeals before the First Appellate Authority who, vide the impugned orders set aside the order of the lower authorities and allowed the appeals. Aggrieved by the impugned orders, the present appeals are filed. 5. I have considered the arguments of the learned A.R. and perused the records. The question to be answered is where the imported goods are sold after their import and after paying appropriate amount of VAT and .....

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..... rate of SAD is only 4% regardless of the exact rate of VAT applicable to the goods. 6. If, for instance, the appropriate rate of VAT is 12% and imported goods suffer only 4% SAD the field is not completely even. On the other hand, if the appropriate rate of VAT is 2% and SAD is levied at 4% the domestic manufacturer gets an unfair advantage to the extent of 2%. Regardless of these anomalies, the taxation law should be applied as it is drafted regardless of consequences. The refund under Notification No. 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 t .....

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..... duce the refund amount in such a situation and the entire 4% CVD, if otherwise found eligible, shall be refunded . It is evident from the above clarification of C.B.E. & C. that even if VAT/Sales tax was less than 4%, the appellant was entitled to refund of SAD which was 4% so long as VAT/sales tax was paid. In other words, so long as appropriate VAT/Sales tax was paid, SAD refund was admissible even if the appropriate sales tax/VAT was less than SAD; if the sales tax/VAT was NIL, so be it. In other words what is required in terms of the said notification is payment of appropriate sales tax/VAT regardless of the rate thereof. It logically follows that if the appropriate rate of sales tax/VAT was NIL then the appropriate sales tax/VAT pa .....

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