Substantial compliance in SAD refund claims accepted where invoices show nil duty and the incidence was not passed on.

Refund of special additional duty under Notification No. 102/07-Cus was treated as admissible where the invoice showed SAD as nil and the duty incidence was not passed on to the buyer. The absence of a separate endorsement in the invoice was considered non-fatal because the document itself disclosed the relevant fact and the object of the notification was satisfied in substance. The notification was read liberally, and substantial compliance with the prescribed conditions was accepted. On that basis, denial of refund on a purely technical ground was held unsustainable, and consequential relief followed.

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Issues: Whether the refund of special additional duty was admissible when the invoice showed SAD as nil and no separate endorsement was made in the invoice in terms of condition 2(b) of the notification.

Analysis: The refund claim arose under Notification No. 102/07-Cus governing refund of SAD on imported goods subsequently sold on payment of VAT. The invoice reflected SAD as nil, showing that the incidence of SAD had not been passed on to the buyer. On that basis, the object of the notification was found to have been satisfied. The absence of a formal endorsement was treated as non-fatal because the invoice itself disclosed the relevant fact and exemption notifications were to be read liberally. The condition in the notification was therefore treated as complied with in substance.

Conclusion: The refund claim was admissible and the denial of refund was unsustainable.

Final Conclusion: The appeal succeeded and the assessee was held entitled to refund of SAD with consequential relief.

Ratio Decidendi: Where the invoice itself shows nil SAD and the statutory object of preventing passing on of the duty incidence is satisfied, a formal endorsement requirement under the refund notification may be treated as substantially complied with and refund cannot be denied on that technical ground.

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