Custom, Excise & Service Tax Tribunal
M/S. Dish Tv India Ltd vs C.C. (Icd) Tughlakabad, New Delhi on 27 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Customs Appeal No. C/104/2012-Cu[DB]
[Arising out of Order-In-Original No. 48/2011 dated 31.12.2011 passed by CC (ICD) New Delhi]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
Honble Mr. B. Ravichandran, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Dish TV India Ltd. ...Appellant
Vs.
C.C. (ICD) Tughlakabad, New Delhi Respondent
Appearance:
Mr. A. R. Madhav Rao (Advocate) for the Appellant Mr. Amresh Jain (DR) for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) Date of Hearing.24.08.2016 Date of Decision 27.09.2016 Final Order No. 53811 /2016 Per V. Padmanabhan:
The present appeal is directed against the order in original dated 31.12.2011 passed by the Commissioner of Customs (ICD), New Delhi. The appellant in engaged in the provision of Direct to Home Services (DTH) Digital Set Top Boxes (STB) along with certain other equipments are required for transmission of DTH channels to the television of subscribers. The STBs are imported by the appellants and then sold in the domestic market. The dispute in the present case has arisen on import of set top boxes by the appellant. At time of import, they paid the applicable customs duty, additional duty, educational cess and also special additional duty on the STBs on the basis of declared retail sale price (RSP). The Notification No. 102/2007 dated 14.09.2007 provides for exemption to goods from SAD which are imported and subsequently sold as such, if the importer pays appropriate VAT or sales tax while selling such goods. The appellants sold imported STBs and claimed refunds of SAD paid. Refund claims were sanctioned by the Jurisdictional Assistant Commissioner. SCN dated 26.11.2010 was served upon the appellant for recalling the refunds on the allegation that the sanctioned refunds were erroneous. The main allegations raised in the SCN were:
(i) The STBs were not sold as such but were assembled with other items and were sold as antenna systems and accessories.
(ii) The descriptions in the bills of entry did not match the description in the domestic sale invoices.
(iii) Since the appellants sold the products at a price lower than the price of import, it was alleged that appropriate VAT was not paid by the appellant.
2. The appellants challenge to the impugned order is mailny on the following grounds:
(i) While selling the imported STBs, the appellant packaged various other components together described under antenna system and accessories and sold the same to other distributors on payment of appropriate VAT. However, in the packing list it is clearly mentioned that it includes set top boxes. In fact the refund sanctioning authority has carried out verification of such documents and have come to the conclusion that the imported STBs have been sold by the appellant on payment of appropriate VAT. Consequently, the refunds sanctioned are in order. The allegation raised by the Revenue that the description in the bills of entry as well as in the invoices are different cannot be sustained.
(ii) The Notification 102/2007 only requires that for claiming refund of SAT, the imported goods should be sold in the domestic market as such on payment of appropriate VAT. There is no condition in the said Notification that the VAT paid should be at a price which is not less than imported price. In any case, the total VAT paid by them is more than the quantum of SAD paid on the imported STBs.
(iii) They have also relied upon the case of Madras High Court in Eveready Industries Ld. Vs CESTAT reported in 2016 (337) ELT 189 and argued that without challenging the sanction of refund under Section 35E, the Department cannot initiate suppressed proceedings under Section 11A for determining the amount sanctioned as refund.
3. Heard Ld. Advocate Sh. A.R. Madhav Rao for the Appellant and Ld. DR Mr. Amresh Jain for the Revenue.
4. The appellants imported STBs and paid customs duties including SAD. Subsequently, the STBs have been sold to various distributors and the refund claims stand paid by the Revenue on the SAD originally paid under Notification 102/2007. In the impugned order the refund amounts have been recalled. The appellant sold the imported goods as part of antenna system and accessories at a price lower than the landed cost of the goods and the RSP declared at the time of import. The invoices for sale issued by the appellant describes the goods as antenna system and accessories however from the packing list attached with invoice it can be clearly made out that this package includes STBs. The impugned order also records in detail the verifications carried out by Revenue with some buyers of Dish TV selected at random. On the basis of the replies received by Revenue from the buyers of STBs. Revenue came to the conclusion that the invoices were received along with packing list and the package contained STBs. These verifications as well as the conclusions arrived at by Revenue to sanction the refund claims find place in the impugned order in para 5 (viii) to (xxvi). It is also to be recorded that the refund claims stand paid with the approval of Commissioner. After payment of the refund after satisfying themselves that the imported STBs have in fact been sold by the appellant to their distributors, the present SCN has been issued. The main ground on which the impugned order recalls the refund is that the appellant has not cleared for sale the same goods as imported. The SCN further alleged that the imported STBs were cleared after the appellant undertook manufacture which resulted in a new product i.e. antenna system and accessories. However, it is seen that in the impugned order Commissioner has held that no manufacture has been undertaken by the appellant and still proceeded to pass the orders recalling the refund.
5. The second ground on which the impugned order seeks to deny the refund is that appropriate VAT has not been paid on the imported STBs. The appellant admits that the imported STBs have been sold at prices which are lesser than the RSPs declared at the time of import. However, they have also argued that the total VAT paid on the set top boxes at the time of sale would be numerically more than the total SAD paid at the time of import. It is nobodys case that the appellant has indulged in any under valuation of the goods for the purpose of payment of VAT, in which case, the appropriate authority to initiate action would be the State Government. It is on record that VAT stands paid at the prescribed rates on the value declared in the invoices. To our minds, this is to be deemed as appropriate payment of VAT. We also note the Ministry of Finance vide Circular No. 6/2008-Cus dated 24.04.2008, while dealing with the Notification No. 102/07-Cus has observed as under: The exemption contained in the said notification envisaged 5.3 that the importer shall file a claim for 4% CVD (said additional duty of Customs) paid on imported goods and shall pay on sale of the 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 happens to be lower than 4%, the refund would be restricted to the lower amount. As such, it is clarified that it will not be appropriate to reduce the refund amount in such a situation and the entire 4% CVD, if otherwise found eligible, shall be refunded. We find no justification to deny the refunds on such ground.
6. The appellant also relied upon the case of Eveready Industries decided by the High Court of Madras (supra), wherein the Honble High Court has faulted the Department for recall of the sanctioned refund by a proceeding under Section 11A without reviewing refund sanction order under Section 35E. Inasmuch as we are convinced that the refund sanctioned is proper, we do not consider it necessary to discuss this ground.
7. In line with the above discussions, we set aside the impugned order and allow the appeal with consequential benefit, if any.
(Pronounced in the open court on 27.09.2016)
(V. Padmanabhan) (S. K. Mohanty)
Member(Technical) Member (Judicial)
Neha
6 | Page
C/104/2012-Cu[DB]