SAD-additonal duty-4%

[Mukesh Mudi]

Is  Dripper are allowed to take benefit of SAD. Because when we sell the final product Drip line which is in-cooperating the Dripper.

We undertake that certain activities like embedding the dripper in drip line through Extrusion where it cannot be said that we manufactured a new product by any means, Dripper (Emitters) remain Dripper and by embedding the dripper the product remains the same.

Here we are presenting sales invoice with the same description of B/Entry under the Bill of Material(BOM).

can we claim for Dripper SAD-additonal duty-4%.

Mukesh Mudi

[YAGAY and SUN]

If you are selling goods as such under Notification No. 102/2007-Customs, then, you can avail the Benefit of SAD Refund otherwise not.

[Mukesh Mudi]

we are taking benefit of 102/2007,on certain items. Out of which we want to ensure ourself for the item which is used in producing our drip irrigation pipes as the item does not changes its form nor changing its shape size or use. It is invoiced as such but embedded with Drip irrigation pipes not separately.

[YAGAY and SUN]

According to the Notification No. 102/2007-Customs, if the imported goods are intended for sale as such.  In your  case you have  manufactured a new product.

Please also read the condition no. 2 (e) (iii) in this regard.

[Mukesh Mudi]

we are manufacturing a new product but the actual imported item is not chaged it is as such while sales.

we also fulfilling the condition no. 2 (e) (iii) in this regards.

[YAGAY and SUN]

If this is so, then, you may avail the benefit.  But this is subject to customs department's verification.  One more thing which is required to be mentioned herewith that Customs Department will conduct Audit under 'Post Clearance Audit at the Premises of Importers and Exporters Regulations, 2011’ . 

So be careful while filing the refund claim.  If required, please do consult with your seniors and Tax Consultant.  Also obtain an opinion in this regard.

[Mukesh Mudi]

can you please do me a favour by suggestion any case laws/ Tribunal/ Cestat cases where these type of claim has been allowed.

[YAGAY and SUN]

Well, there is no such case law.  But you have to check following three points:-

1. Whether, any manufacturing process has been conducted on imported goods or not?
2. If yes, then whether a new product has been come to existance or not?
3. If not, then, whether goods imported were removed as such or not?  Meaning that If I import say 'mouse' then, whether mouse as such sold in India will be determinative factor to conclude the refund under Notification No. 102/2007-Customs

Exibit:-  Supose, pens are imported and sold as such, then this will be a fit case for 102/2007-Customs.

[YAGAY and SUN]

I perceive that you must have received a SCN or your refund has been disallowed by the Customs Authorities.

[Mukesh Mudi]

no sir, we are just trying to gather details  for claiming

[YAGAY and SUN]

It is a good indicator that you are doing your home work.  Keep it up.......

[Mukesh Mudi]

thank you, it is a request if you gather any cases nearby to our case. please suggest us.

[YAGAY and SUN]

Sure, I'll.

[YAGAY and SUN]

Refund of SAD available even if importer undertakes some processing on imported goods:-

Mere change of tariff heading of imported goods and goods sold subsequently by undertaking certain processes would not disentitle the importer from claiming SAD or Special CVD refund.  The Hon'ble Tribunal in this matter, after relying on previous decision also held that merely cutting and slitting of coils would not amount to manufacture unless a new, different and distinct article having distinct name, character and use emerges from the process.

Earlier, appellant had imported HR/CR Coils and undertook slitting and cutting of imported goods before domestic sales on payment of VAT/Sales Tax. Department had denied refund of SAD under Notification No. 102/2007-Customs on the ground that the importer had undertaken further processing on imported goods and also the tariff heading of goods imported and goods sold subsequently by the importer are different.

POSCO INDIA DELHI STEEL PROCESSING LTD. Vs. COMMISSIONER (2012 -TIOL 1769 CESTAT AHM)

AI Summary

SAD refund eligibility: embedded components can qualify if no new article with distinct name, character and use emerges.
SAD refund hinges on whether imported components are sold as such or transformed into a new article; if drippers remain identifiable when embedded in drip lines and conditions like 2(e)(iii) are satisfied, refund may be claimed, subject to Customs verification and Post Clearance Audit. Tribunal precedent holds that mere processing that does not yield a new article with distinct name, character and use does not preclude refund entitlement.