TaxTMI 
TaxTMI 
2026 (5) TMI 812
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....nt had paid the applicable SAD as prescribed vide Section 3 (5) of the Customs Tariff Act, 1975, for import of goods to execute the contract awarded to them on 14.12.2009 by M/s. Bangalore Metro Rail Corporation Ltd. (BMRCL). the Appellant has entered into a contract with BMRCL for undertaking the works related to the Bangalore Metro project along with supply of requisite goods. The Appellant accordingly, imported goods from foreign suppliers specifically for BMRCL, as evidenced by purchase orders and supplier invoices. Upon arrival in India, the Appellant filed Bills of Entry to clear the said goods on payment of applicable duties of customs and thereafter, sold the same to BMRCL. 3.1 The appellant submits that 'sale in the course of import' is outside the levy of sales tax under the Section 5(2) of the Central Sales Tax Act, 1956, read with Article 286 of the Indian Constitution. Relevant portion of the said Article and Section is reproduced below for ready reference. Article 286 of the Constitution of India "286. Restrictions as to imposition of tax on the sale or purchase of goods. (1) No law of a State shall impose, or authorise the imposition of,....
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.... submitted that the refund of SAD is governed by conditions enumerated in the Notification No. 102/2007 dated 20.12.2017, as amended. Relying on the judgment of Hon'ble Apex Court in the case of Dilip Kumar & Company 2018 (361) E.L.T. 577 (S.C.) submits that the exemption notification should be interpreted strictly; the burden of proving applicability would be on the appellant to show that his case comes within the parameters of the exemption clause or exemption notification. The impugned Notification of refund of SAD is applicable only, when both the sales tax / VAT and SAD are paid at the appropriate prescribed rates. Whereas, for the case at hand, when levy of sales tax / VAT itself is not there, question of payment of the same at appropriate prescribed rate, does not arise hence the exemption notification is not applicable to them. 4.1 Further he submits that the non-fulfillment of conditions of the Notification No. 102/2007 dated 20.12.2017 as discussed and deliberated in the impugned orders makes the appeal liable for dismissal. With regard to the appellant's contention that conditions are deemed fulfilled owing to impossibility of performance, it is submitted that the cas....
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....annot claim such benefit. Reference is invited to the Hon'ble Supreme Court judgement in the case of Mafatlal Industries Ltd. Versus Union of India. The para 99(iv) of the judgement is reproduced: ...................A person, whether a manufacturer or importer, must fight his own battle and must succeed or fail in such proceedings. Once the assessment of levy has become final in his case, he cannot seek to reopen it nor can he claim refund without re-opening such assessment/order on the ground of a decision in another person's case. Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund." 33.1. 5. Heard both sides. The show-cause notice dated 16.04.2014 issued to the appellant denying the refund of SAD alleged as follows: 'As per Notification No. 102/2007-Cus dated 14.09.2007, the importer shall pay on sale of imported goods appropriate sales tax or value added tax as the case may be and pr....
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....he sale of the imported goods and submit documents evidencing such payments. Here, the importer has not paid Sales tax/VAT wrongly claiming that their sale is in the course of import and are exempted under Sec 5(2) of CST Act. From the usage of word "shall" in the condition (b) referred above; it is apparent that the said condition is mandatory in nature and, hence, has to be followed strictly. As such, there is no discretion in the matter and refund in a case where the importer has not fulfilled the mandatory conditions cannot be sanctioned. 17. It is held by Hon'ble Supreme Court in the cases M/s. Rajasthan Spg.& Wvg.Mills u/s Collector of C.Ex., 1995 (77) ELT 474 (SC) and M/s. Mihir Textiles Ltd., v/s Collector of Customs (1997 (92) ELT 9(SC)/ that the exemption notifications have to be construed strictly and the Exemption/Benefit dependent upon satisfaction of certain conditions cannot be granted unless such conditions are complied with, even if such conditions are only directory. In the present case, the condition (b) of the aforesaid notification is mandatory in nature. 18. ------Since the importer was aware that they have exemption from sales tax, they ....
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..... Hence, they should have ensured that they adhere to the conditions mentioned in the said Notification which are mandatory. As they have not adhered to the conditions they are not entitled for the refund claim as held by the LAA. 12. I find that it is well settled principle of interpretation of statute that a statute has to be construed without adding any words to it or subtracting any words from it. In this connection, reliance is placed on the decision of the Hon'ble Supreme Court in the case of Shabina Abraham Vs Commr C Ex & Cus, [2015 (322) ELT. 372 (S.C.)) wherein it was held that - 'Taxing statute must be interpreted in light of what is clearly expressed - Court cannot imply anything which is not expressed, and it cannot import provisions in statute so as to supply any assumed deficiency Accordingly, on plain reading of the said Notification I find that certain conditions are to be complied in order to avail the benefit of the Notification and if they are not complied with, the benefit is not available. In the instant case as the appellant have not complied with the conditions laid down in the Notification, they are not entitled for refund of Special additi....
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....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 that the importer shall file a refund claim for 4% CVD ("said additional duty of Customs") paid on imported goods and shall pay on sale of the said goods "appropriate Sales Tax or VAT as the case may be". Hence, it is clear that there is no stipulation in the notification that the exemption is available only if the rate of ST/VAT is equal to or higher than the rate of additional duty of Customs; nor is there a condition that if the rate of ST/VAT happen to be lower than 4%, the refund would be restricted to the lower amount. As such, it is clarified that it....