Leviability of SAD on re-importation of goods

PJ/Case Laws/2010-11/1072

Case: M/s Lakshmi Machine Works Ltd v/s CCE, Coimbatore

Citation: 2011-TIOL-180-CESTAT-MAD

Issue:- Re-importation of goods on payment of Customs duty and SAD – refund of SAD – admissible as SAD was not required to be paid in terms of Notification No. 96/95-Cus.

Brief Facts:- Appellants re-imported the impugned goods which were earlier exported for participation in an international exhibition held at Milan, Italy from 3^rd October, 2002 to 8^th October, 2002. The goods were exported without payment of duty under bond.

At the time of re-importation the appellants have paid Customs Duty equal to Central Excise Duty leviable on the impugned goods. In addition, they have also paid the Special Additional Duty of Customs under protest on the insistence of the Department.

Appellants filed refund claim of the SAD which according to them was not payable in view of Notification No. 94/96-Cus, dated: 16.12.1996. Refund claim of the appellants was rejected by both the Authorities Below.

Hence, appellant filed further appeal before the Tribunal.

Appellant’s Contention:- Appellant contended that they have sold the impugned goods subsequent to import and also stated that the exemption under Notification No. 94/96-Cus is in respect of basic custom duty, additional duty of customs as well as special additional duty of customs and hence they were not required to pay the SAD. Having paid the same under protest on the insistence of the department, the appellants are entitled for refund.

Appellant relied upon the following cases:

Alok Industries Ltd. versus CCE, Mumbai [2003 (156) ELT 276 (Tri. – Mumbai)]
CC, Mumbai versus Manugraph Industries Ltd. [2008 (228) ELT 388 (Tri. – Mumbai)]
Hi-Tech Arai Ltd. versus CC, Chennai [2007 (220) ELT 166 (Tri. – Chennai)]
Shri Ram Hari Ram & Sons Pvt. Ltd. versus CC, New Delhi [2009 (236) ELT 151 (Tri. – Del.)]
CC, Bangalore versus Ace Designers Ltd. [2006 (200) ELT 85 (Tri. – Bang.)]

Reasoning of Judgment:- The Tribunal found that Notification No. 94/96-Cus dated 16.12.1996 exempts re-imported goods from so much of duty of the Customs, the additional duty and special duty of customs as in excess of the amount indicated in the corresponding entry in Column no. 3 of the Table against Serial no. 1 (d) is the amount of Central Excise duty not paid. In other words, on re-importation, the amount of duty which is payable is equal to the Central Excise Duty. The Notification no. 94/96-Cus, dated 16.12.1996 is a combined exemption notification in respect of basic custom duty, additional duty of customs and special duty of customs. Tribunal noted that this is the view consistently taken in all the earlier decisions of the various benches of the Tribunal cited above.

Hence, the Tribunal held that there was no requirement for the appellants to pay the SAD of the customs in respect of the impugned goods, since all the customs duties stood exempted under Notification no. 94/96-Cus in excess of the amount of central excise duty which has been paid by the appellants. Consequently, they are entitled to the claim refund. Impugned order set aside.

Decision:-Appeal allowed with consequential benefit.

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PJ/Case Laws/2010-11/1072

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