Stainless steel manufacturer wins CVD refund appeal under Advance Authorization Scheme after Notification 79/2017 retrospective application

CESTAT Allahabad allowed the appeal regarding CVD refund entitlement. The appellant, a stainless steel coil manufacturer under Advance Authorization Scheme, was denied refund after Government imposed CVD @ 18.95% vide Notification 1/2017-Customs dated 07.09.2017, later exempted through Notification 79/2017-Cus dated 13.10.2017. The adjudicating authority rejected refund claiming the exemption notification was not retrospectively applicable and HC judgments were not binding as appellant was not party to those cases. CESTAT held that various HC decisions granted similar benefits and Notification 79/2017 has retrospective applicability, allowing refund with prescribed interest.

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Issues:
Refund claim of CVD under Advance Authorization Scheme; Retrospective applicability of Notification No. 79/2017-Cus dated 13.10.2017; Interpretation of Foreign Trade Policy (FTP) 2015-2020; Scope of appeal before Ld. Commissioner (Appeals); Applicability of Section 149 of the Act.

Analysis:
The appellant, engaged in manufacturing Stainless Steel Utensils and registered with the GST department, imported goods under Advance Authorization Scheme, facing CVD and IGST levies. The appellant sought provisional assessment with a bank guarantee, but goods were assessed finally. The dispute arose due to the exemption of CVD under Notification No. 79/2017-Cus dated 13.10.2017, which was not applied retrospectively by the adjudicating authority, leading to the rejection of the refund claim amounting to Rs. 16,31,373/-. The Commissioner (Appeals) upheld the rejection, prompting the present appeal.

The appellant argued that the levy of CVD under Section 9 was against the government's intention, rectified by Notification No. 79/2017-Cus dated 13.10.2017, exempting CVD under Advance Authorization Scheme. The appellant relied on judgments, including the Delhi High Court's decision granting retrospective benefit of the notification. The appellant emphasized fulfilling export obligations and submitted Export obligation discharge certificate. The appellant contended that the Ld. Commissioner (Appeals) exceeded the appeal's scope by addressing the maintainability of the refund claim.

The Tribunal found that the appellant, manufacturing Stainless Steel coils under Advance Authorisation Scheme for export, was entitled to CVD refund as per the exemption notifications. Notably, the government rectified its mistake by exempting CVD through Notification No. 79/2017-Cus dated 13.10.2017, which various High Courts recognized retrospectively. The Tribunal, considering precedents, allowed the appeal, granting the appellant the refund of CVD amounting to Rs. 16,31,373/- with interest. The Tribunal's decision was based on the retrospective applicability of the notification and the appellant's compliance with the scheme's requirements.

In conclusion, the Tribunal's judgment favored the appellant, emphasizing the retrospective nature of the exemption notification and the appellant's entitlement to the CVD refund under the Advance Authorization Scheme. The decision highlighted the importance of adhering to government policies and rectifications in customs matters, ultimately granting the appellant the relief sought in the appeal.

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