By TIOL News Service

AHMEDABAD, JAN 24, 2019: 'SAD' refund claims filed by the appellants under  Notification No.102/2007-Cus, dt.14.09.2007 were rejected on the ground that the assessee had not paid VAT upon sale of the imported goods i.e. coils.

It is alleged that what was sold subsequently by the assessee and on which VAT was paid is altogether different goods i.e. Proflex roof.

The Commissioner(A) upheld this order and the CESTAT too rejected the appeals.

Please see - 2014-TIOL-1315-CESTAT-AHM.

The Gujarat High Court too dismissed the importer's appeal by inter alia observing thus -

+ In the present case, what is imported by the appellant is coil sheets. The Special Additional Duty is paid on such imported goods namely coil sheets. Thereafter, what is manufactured and sold by the appellant is "Proflex Roof" and on such "Proflex Roof" VAT is paid. Therefore, it cannot be said the assessee has paid the VAT on the goods imported, on which, Special Additional Duty has been paid. Under the circumstances,  one of the conditions mentioned in the Notification No. 102/2007-Cus dated 14.09.2007 has not been complied with.

+ It is required to be noted that even in the invoice the rate of laying of "Proflex Roof" is also charged on per square meter including the value of the material. There is no separate invoice / bill issued for coil sheets. Therefore, it cannot be said that what is sold by the appellant to his client is same goods which is imported i.e. coil sheets. Under the circumstances and one of the conditions of Notification No. 102/2007-Cus dated 14.09.2007 has not been complied with i.e.  appellant has not paid VAT on the goods imported i.e. coil sheets and what is sold subsequently is "Proflex Roof" and what is charged by the appellant is for "Proflex Roof on which the VAT has been paid and as the VAT is not paid on the coil sheets, the appellant is rightly denied the refund of Special Additional Duty claimed under the Notification No. 102/2007-Cus  dated 14.09.2007.

Kindly see -  2017-TIOL-427-HC-AHM-CUS.

The Special Leave Petition against this order was also dismissed by the apex court - 2017-TIOL-273-SC-CUS.

Incidentally, another set of refund claims also faced a similar fate at the hands of the lower authorities.

Due to pecuniary jurisdiction, out of the seven appeals filed by the appellant against the common order of the Commissioner (Appeals), three appeals came to be listed before a Single Member Bench of the Tribunal and four appeals before a Division Bench of the Tribunal.

Orders contained in the aforementioned three appeals were upheld by a Single Member Bench of the CESTAT reported as - 2017-TIOL-1804-CESTAT-AHM. This order is dated 17.04.2017.

An almost similar fate lay in store for the other set of four appeals filed by the importer and which came to be disposed of by the CESTAT, Division Bench (which included the Member who had passed the SMB decision).

In this order, it was observed thus -

"8…The Ld Advocate for the asessee-appellant in the present appeals, has not disputed the inadmissibility of refund of 4% SAD paid on those coils/sheets which were later converted into roofing materials and installed in the premises of the customer against works contract. However, the Ld. Advocate has vehemently argued that the principle of law settled by the Hon'ble Gujarat High Court cannot be made applicable in the changed circumstances, when the imported coils or sheets are sold as such, that is, in coil and sheet form by the assessee-appellant, which is evident from the invoices raised by them. We find force in the contention of Ld. Advocate for the assessee-appellant. However, on going through the records, we could not find detailed bifurcation of the sales against 'works contract' and as such sale of coils or sheets, submitted earlier before lower authotities along with evidence, in support of their claim, now advanced before this forum. Therefore, to ascertain the clearance of imported coils or sheets as such against invoices, the matter needs to be remanded to the Adjudicating Authority. It is made clear that the appellant would not be entitled to refund of the 4% SAD paid, when such supplies were against works contract for installation of the roofing material made out of imported goods in the premises of the customers/buyers…." 

We reported this order dated 27.09.2017 as - 2017-TIOL-4208-CESTAT-AHM.

A Rectification Of Mistake application came to be filed against the earlier order dated 17.04.2017 reported as - 2017-TIOL-1804-CESTAT-AHM.

The Single Member Bench dismissed this ROM application on the ground that issue not raised during the course of arguments cannot be allowed under the garb of rectification of order. The issue that was apparently raised in ROM by the importer was of the sale of ‘coils' to customers. This order dated 06.03.2018 is reported as - 2018-TIOL-2287-CESTAT-AHM.

Against this order, the appellant is before the High Court.

It is submitted that a piquant situation has arisen whereby out of the same group of appeals, in four cases, the appellants have been granted partial relief, whereas in three cases their appeals have been dismissed. It is, therefore, submitted that to maintain parity in all the cases, these matters are required to be remanded to the adjudicating authority for ascertaining the quantum of "as such" sale.

The counsel for the Revenue adverted to the provisions of s.130(6)(a) of the Customs Act, 1962 and emphasised that the High Court may determine any issue which has not been determined by the Appellate Tribunal but in the present case the issue was not at all raised before any of the lower authorities or the Tribunal.

The High Court considered the submissions and after admitting the appeals observed thus -

"14. …, it is apparent that an anomaly has arisen in two different judgments of the Tribunal on identical facts, on account of the appeals being bifurcated on the basis of pecuniary jurisdiction. In the opinion of this court, when all the appeals arise out of a common Order-in-Appeal and the facts are also identical, for the purpose of uniformity, a similar order is required to be passed in all the appeals. When in one group of appeals arising out of the identical facts, the appellant has been permitted to claim the benefit of refund of 4% SAD on goods sold "as such", the appellant cannot be denied the similar benefit in the other group of appeals. Under the circumstances, the anomaly that has arisen on account of the aforesaid circumstances needs to be rectified. The technical plea that such an issue was not raised before the Single Member Bench of the Tribunal would not come in the way of this court in rendering substantial justice in the present case."

The appeal was allowed.

Consequently, the matter was restored to the file of the adjudicating authority to ascertain the quantum of "as such sale" of the imported material sold in coil or sheet form, which alone could be considered for refund of 4% SAD paid at the time of import.

(See 2019-TIOL-201-HC-AHM-CUS)