TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 565
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....vt. Ltd., this Bench vide Misc. Order No.40143/2017 dated 23.3.2017 had directed that the said appeal should be listed along with other matters in the issue of refund of additional duty of customs when no sales tax was payable under such law. Hence this appeal is also being taken up along with M/s. Kubota Agricultural Machinery India Pvt. Ltd. 2. Facts of the case are as follows:- 2.1 In the appeals of Kubota Agricultural Machinery India Pvt. Ltd., they had imported "Kubota Combine Harvester with Accessories" and had inter alia discharged 4% Special Additional Duty of Customs (SAD) under section 3(5) of Customs Tariff Act, 1975. Subsequently, the appellants sought refund of the SAD amounts in terms of Notification No.102/2007-Cus. dated 14.9.2007. The original authority rejected the refund claim for non-fulfillment of condition 2(3) of the said Notification since the appellant had not paid VAT / Sales Tax on certain invoices. The authority also found that there was mis-match between the description of the goods with the sales invoice. On appeal, Commissioner (Appeals), rejected the appeals on the ground of non-payment of sales tax / VAT. The lower appellate authority in Appeal No....
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....ment of duty on final product which imposed a condition that 'appropriate duty has been paid on the raw materials' used in the manufacture. He submitted that the Hon'ble Supreme Court, however held that there is no cascading effect when no excise duty is payable on raw material, and the hardship that the notification seeks to alleviate does not arise. He submits that the very issue in the present appeal has been the subject matter of consideration of the Tribunal in the case of Gazal Overseas Vs. Commissioner of Customs, New Delhi reported in 2016 (332) ELT 767 (Tri. Del.) wherein it has been unequivocally held that even when the appropriate rate of sales tax / VAT was nil, then the appropriate sales tax / VAT paid will also be nil and sales tax being nil, assessee would be eligible for refund under Notification No.102/2007. 4. Per contra, learned AR Shri A. Cletus supports the impugned orders. He contends that clause 2(d) of the said Notification clearly requires the importer to pay appropriate sales tax / VAT to be paid to be eligible for refund under that notification. Further, importer is required to produce documents evidencing payment of additional duty, invoicing sa....
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....iament as follows:- "120. I have received representations from a cross section of the industry about the regime of import duties. Many Hon'ble Members have also written to me expressing their concern on the general health of the domestic industry. The demands are diverse and asymmetrical in most case. This is for obvious reasons. While the users of imported raw materials and other inputs or the consumers of finished imported goods would benefit from further reduction in import duties, the domestic producers have made a convincing case for urgent relief to the domestic industry. 121. I have given my earnest consideration to these concerns and the competing claims. I am persuaded about a clear disability that our commodity taxation inflicts on the indigenous goods vis-a-vis the imported goods. While the former are subjected to sales tax and other local taxes and levies, the import sector, escapes them by their very nature. In order to provide a level playing-field to the domestic industry, I propose to impose an additional non-modvatable levy of 8% on imports which is approximately equal to the burden of local taxes on domestic producers. This duty should not be viewed as a prote....
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....eals, imported goods suffer nil rate of VAT/Sales Tax. The question that has to be answered is whether for the purpose of 2(d) of the above Notification, whether such "Nil" rate of sales tax / VAT/CST can be considered as "appropriate duty". 6.7 We find that the Tribunal's decision relied upon by the learned counsel has answered this question in a very convincing manner in the case of Gazal Overseas (supra). The following relevant portions of the said decision makes for illuminating reading:- "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 of SAD subject to the condition that the importer shall pay appropriate sales tax or VAT, as the case may be. In the present case, the appropriate sales tax or VAT being NIL the appellants cannot be said to have violated the said conditions of the said notification inasmuch as it cannot be said that they have not paid appropriate sales tax/VAT. In this regard, it is seen that vide Circular No. 6/2008, dated 28-4-2008 C.B.E. & C. in para 5.3 thereof clarified as under : "5.3 The exemption contained in the said notification envisages th....
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....fect from March 1, 1987, the said goods became excisable to duty at the rate of fifteen per cent ad valorem. It is in the above circumstances that the Court held, on the basis of Section 3 and Rule 9A, that though the goods were produced or manufactured prior to March 1, 1987, still they attracted duty at the rate prevailing on the date of their removal, i.e., fifteen per cent. Para-7 clearly brings out the ratio of the said decision. The relevant portion in Para 7 reads: Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for administrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under Rule 9A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory v. Superintendent of Central Excise - [1986 (23) E.L.T. 313] where it was decided that the words `as being subject to a duty of excise appearin....