Appeal allowed for Rs. 5,51,761 refund due to non-passing of SAD credit. Compliance with Cenvat credit procedures emphasized.

The Member (Judicial) allowed the appeal, finding the refund of Rs. 5,51,761 admissible to the appellant. It was determined that the appellant did not pass on the 4% Special Additional Duty (SAD) credit to buyers, as evidenced by invoices, buyer certificates, and RG 23 registers. The judgment emphasized compliance with Cenvat credit procedures and directed consequential relief in accordance with the law, resolving the dispute in favor of the appellant.

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Issues:
Refund claim of 4% SAD, rejection of claim by adjudicating authority, appeal before Commissioner of Customs (Appeals), rejection of appeal, admissibility of refund.

Detailed Analysis:

1. Refund Claim of 4% SAD:
The appellant filed a refund claim of Rs. 18,52,267 for 4% Special Additional Duty (SAD) paid on imported goods under specific bills of entry. The adjudicating authority sanctioned a partial refund of Rs. 13,00,507 but rejected Rs. 5,51,761, alleging the appellant passed on the SAD to buyers based on evidence from Excise invoices and RG 23 extract.

2. Rejection of Claim and Appeal:
The Commissioner of Customs (Appeals) upheld the rejection of the claim for Rs. 5,51,761, leading to the appellant filing an appeal challenging this decision. The appellant argued that the Cenvat credit of 4% SAD was neither passed on to buyers nor availed by them, supported by stamp on invoices and certificates from buyers confirming non-availment of the credit.

3. Arguments and Submissions:
The appellant's counsel highlighted that despite mentioning 4% SAD in invoices, a stamp indicated no credit shall be admissible, and buyer certificates verified non-availment of SAD credit. The RG 23 register of buyers showed credit only for CVD and related Cess, not for SAD. The Revenue's representative reiterated the findings of the impugned order, emphasizing the mention of SAD in appellant's invoices.

4. Judicial Review and Decision:
The Member (Judicial) carefully reviewed submissions and records, noting the conflicting claims regarding the passing on of SAD credit. The analysis of invoices, buyer certificates, and RG 23 registers revealed that the appellant did not pass on the SAD credit, and buyers did not avail it. Referring to relevant notifications and circulars, it was concluded that the appellant complied with the necessary procedures by endorsing invoices to prevent SAD credit availment by buyers.

5. Final Decision and Relief:
Based on the undisputed facts and legal requirements, the Member (Judicial) found the refund of Rs. 5,51,761 admissible to the appellant. The appeal was allowed, with directions for consequential relief as per the law. The judgment clarified the compliance with Cenvat credit procedures and upheld the appellant's entitlement to the refund amount, resolving the dispute in favor of the appellant.

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