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of <h1>Tribunal Grants SAD Refund to Appellant Under Notification No.102/2007-CUS</h1> The Tribunal allowed the Appellant's Appeal, granting a refund of Special Additional Duty (SAD) under Notification No.102/2007-CUS. The decision was based ... Eligibility for refund of SAD when supplied/sold in DTA clearances from SEZ - Notification No.102/2007-CUS - Goods were originally imported by the appellant for use in the SEZ Unit and such imports are considered to be warehousing of goods after importation, so, the responsibility of payment of duty on such warehoused goods when cleared lies on the importer. Held that:- as per definition of importer in Section 2(26) of the Customs Act, 1962, appellant remained an importer till the goods are cleared for home consumption i.e. sale to DTA unit in the present proceedings. As per Rule 48(1) of SEZ Rules, 2006 a Bill of Entry for home consumption is required to be filed by Domestic Tariff Area buyer. The proviso contained in this Rule 48(1) mentions that Bill of Entry for home consumption may also be filed by SEZ Unit on the basis of authorization from a DTA buyer. For the purpose of interpreting a Notification issued under Section 25(1) of the Customs Act, 1962 the definition of importer given in Section 2(26) of the Customs Act, 1962 is required to be followed, according to which the Appellant was an importer of the goods when imported into India and paid VAT at the time of sales to DTA units. The SAD paid has not been recovered from the DTA buyers. The conditions of Notification No.102/2007-CUS are, therefore, fulfilled and the ratio laid down by the case law Adinath Trade Link v. Commissioner of Customs, Kandla [2013 (8) TMI 430 - CESTAT AHMEDABAD] is squarely applicable to the facts of the present case. Hence, the appellant is eligible for refund. - Decided in favour of appellant with consequential relief Issues Involved:- Eligibility of the Appellant for refund of Special Additional Duty (SAD) under Notification No.102/2007-CUS dated 14.09.2007 when goods are supplied/sold in Domestic Tariff Area (DTA) clearances.Analysis:Issue 1: Eligibility for SAD RefundThe Appellant filed an Appeal against the Order-in-Appeal rejecting their refund claim based on the ground that the Appellant failed to show Value Added Tax (VAT) payment on goods sold under DTA. The Appellant contended that only Basic Customs Duty, Countervailing Duty, and Cess were recovered from DTA buyers, with 4% VAT also paid on such sales. The Appellant argued that SAD paid was not recovered from DTA buyers, citing the case law of Adinath Trade Link vs. Commissioner of Customs, Kandla. The Revenue, represented by AC(AR), asserted that only an importer is required to pay SAD and claim a refund if subsequent sales incur 4% VAT. They argued that since DTA buyers, shown as importers, did not pay SAD, the Appellant is ineligible for a refund. The Appellant's Advocate relied on the case law to support their claim.Issue 2: Interpretation of Notification No.102/2007-CUSThe Tribunal examined the case law of CESTAT, Ahmedabad in Adinath Trade Link vs. Commissioner of Customs, Kandla, which granted exemption/refund under Notification No.102/2007-CUS. The Tribunal analyzed the notification's provisions, emphasizing the exemption for goods subject to SAD at importation. The Tribunal interpreted the notification holistically, aligning it with Section 30 of the SEZ Act regarding SAD applicability on goods moving from SEZ to DTA. The Tribunal concluded that the Appellant, as the importer until goods are sold to DTA, fulfilled the conditions for SAD refund under the notification.Issue 3: Definition of Importer and SEZ RulesThe Tribunal referred to the Customs Act's definition of importer, including any person holding themselves out as the importer until goods are cleared for home consumption. The Tribunal noted that the Appellant, as the importer, paid VAT upon selling to DTA units, with the SAD remaining unrecovered from DTA buyers. The Tribunal highlighted Rule 48(1) of SEZ Rules, 2006, requiring a Bill of Entry for home consumption by a DTA buyer, with a provision for SEZ Units to file on DTA buyer's authorization. By following the Customs Act's importer definition and SEZ Rules, the Tribunal found the Appellant eligible for SAD refund, aligning with the Adinath Trade Link case law.In conclusion, the Tribunal allowed the Appellant's Appeal, granting consequential relief if applicable, based on the fulfillment of conditions for SAD refund under Notification No.102/2007-CUS.
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