By TIOL News Service

MUMBAI, JULY 08, 2015: THE appellant had imported certain goods viz. ‘VTRON BRAND' - Video Cube 80 + LED SOURCE + DVI CARD, VTRPM [EDESTA; STAND FOR C-SX803 CUBE], DIGICOM CONTROL MANAGER WORKSTATION etc. At the time of import, they deposited SAD of Rs.10,29,782/- vide TR-6 challan dated 28.10.2011 alongwith other duties. The appellant resold the goods to Western Railway vide Sale Invoice dated 31.10.2011. In the said invoice, Sales Tax/VAT have been shown separately. Further, the declaration to the effect ‘in respect of the goods covered in these invoices, no credit of additional duty of customs levied' is also given.

The appellant filed claim for refund of SAD in terms of Notification No. 102/07 vide refund application dated 25.4.2013. The said claim was rejected on the ground of unjust enrichment by inter alia observing that in the Sales Contract with the Western Railway, it is revealed that the contract amount (sales price) includes all taxes and freight. Accordingly, it was opined that the appellant had passed on the 4% pertaining to the SAD to the buyers and accordingly, the refund claim was rejected.

As the Commissioner(A) upheld this order, the importer is before the CESTAT.

The appellant submitted that in the sales invoices SAD has not been shown separately and further Western Railway is not an assessee under the CEA, 1944 so as to avail any CENVAT credit of SAD. Reliance is also placed on the Board Circular 6/2008 mandating the department to accept the CA certificate furnished by the importer certifying that the burden of 4% SAD has not been passed on to the buyer.

The AR had nothing to add.

The CESTAT in terse terms observed -

"…, I am satisfied that the CVD/SAD have not been passed on to the buyer - Western Railway, in the facts and circumstances of this case -

(i) SAD have not been passed on to the buyer

(ii) There is appropriate declaration on record on behalf of the buyer.

(iii) The appellant have deposited the VAT as shown in the Sales Invoice by crediting the such amount of Sales Tax payable account and after the end of the relevant month have deposited the Sales Tax in the month of November, which is included in the amount of Rs.1,31,99,352/- which squarely covers the Sales Tax amount of Rs.35,27,218.76 under the Sales Invoice to Western Railway.

5.1 Further, it is admitted fact that the appellant have shown the amount as receivable from the Customs in their Balance-sheet as per certificate issued by C.A. In this view of matter, I hold that the learned Commissioner (Appeals) has erred in holding that the appellant have passed the burden of the CVD/SAD to the buyer. Accordingly, the appeal is allowed. The appellant would be entitled to refund of the SAD of Rs.10,29,782/-…."

The adjudicating authority was directed to grant the refund within a period of 60 days along with interest as per rules.

In fine, the appeal was allowed with consequential relief.

(See 2015-TIOL-1363-CESTAT-MUM)