TMI Blog2019 (10) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table 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 suffer VAT but imported goods do not. However, if the goods are imported and thereafter sold, such second transaction being a transaction within India is chargeable to VAT, the importer is entitled to claim refund of 4% SAD paid by him in terms of Notification No. 102/2007 Cus dated 14.09.2007. 4. In the present case, the appellant imported goods and sold them under VAT invoices. However no VAT was paid bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 such VAT is nil whether the importer is eligible for such refund under Notification No. 102/2007-Cus or otherwise. The department seeks to deny this refund on the ground that in respect of exemption from central excise duty in those cases where excise duty has been paid on raw materials, the Hon ble Supreme Court has held in the case of Dhiren Chemicals Industries (supra) that nil excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 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 to paying appropriate amount of VAT. This issue has been decided by the Principal Bench of the Tribunal in the case of Gazal Overseas Vs CC New Delhi [2016(332)ELT 767(Tri-Del)], para 4 of which is reproduced below. 4. We have considered the contention of ld. DR and also perused the refund papers. Notification No. 102/2007, dated 14-9-2007 as amended allowed refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 paid will also be NIL. This decision was followed by the Tribunal Chennai in the case of Malhotra Imports Exports Corporation Vs CC Chennai [2018(359)ELT 535(Tri-Chennai)]. 7. In view of the above, I find that the issue is no longer res integra and refund of SAD under Notification No. 102/2007-Cus is available even if the appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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