Enterprise International Ltd. Vs Commissioner of Customs (CESTAT Chennai)
SAD Liability Upheld Because Exemption Was Withdrawn Before Import Date; VAT Exemption in One State Cannot Eliminate SAD Liability Across India; CESTAT Says SAD Refund Mechanism Requires Prior Payment of Duty; Provisional Assessment Dispute on CVD Does Not Affect SAD Demand.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai dismissed the appeal filed by Enterprise International Ltd. challenging the demand of 4% Special Additional Duty of Customs (SAD) on imported silk fabrics.
The appellant had imported silk fabrics under Bill of Entry dated 21.01.2012 and classified the goods under CTH 5007 while claiming exemption from SAD under Notification No. 20/2006-Cus. The Revenue issued a show cause notice dated 09.11.2012 proposing recovery of unpaid SAD on the ground that the exemption had ceased to apply after amendments introduced through the Finance Act, 2011 effective from 08.04.2011. The adjudicating authority confirmed the demand, and the Commissioner (Appeals) upheld the order, leading to the present appeal.
The appellant argued that SAD was not leviable because there was exemption from VAT under the Uttar Pradesh VAT Act. It was further contended that the assessment remained provisional due to disputes relating to countervailing duty (CVD), and therefore demand proceedings under Section 28 of the Customs Act could not be initiated. Reliance was placed on various judicial decisions in support of these submissions.
