SAD refund on imported goods sold as such cannot be denied for package description or lower VAT-based sale value.

Refund of Special Additional Duty under Notification No. 102/2007-Cus is available where imported goods are sold in the domestic market as such and appropriate sales tax or VAT is paid on the sale. The presence of a package description, such as antenna system and accessories, does not by itself show that the imported set-top boxes ceased to be the imported goods, especially where invoices, packing lists, and departmental verification support the sale of the imported goods to distributors. The notification also does not require the sale value to match or exceed the import value, and refund cannot be denied merely because VAT was paid on a lower sale value. The sanctioned refunds were therefore not liable to be recalled.

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Issues: Whether refund of Special Additional Duty under Notification No. 102/2007-Cus dated 14.09.2007 could be denied on the ground that the imported set top boxes were sold as part of a package described as antenna system and accessories and that the VAT paid on sale was on a value lower than the import value.

Analysis: The notification requires that the imported goods be sold in the domestic market as such and that appropriate sales tax or VAT be paid on such sale. The record showed that the invoices were supported by packing lists indicating inclusion of set top boxes, and the departmental verification itself accepted that the imported goods had been sold to distributors. The fact that the goods were sold in a packaged form under a different description did not, on the facts found, establish that they ceased to be the imported goods. On the VAT issue, the notification did not impose any requirement that the sale value must be equal to or higher than the import value, nor that VAT must exceed the SAD paid. The Central Board's circular clarified that where appropriate VAT is paid, the entire eligible SAD remains refundable even if the VAT rate is lower.

Conclusion: The refund could not be denied on either ground and the appellant was entitled to succeed.

Final Conclusion: The impugned order recalling the sanctioned refunds was unsustainable, and the appeal was allowed with consequential relief.

Ratio Decidendi: Refund of SAD under Notification No. 102/2007-Cus cannot be denied merely because the imported goods are sold in a packaged description or because the VAT paid on the sale value is lower than the import value, so long as the goods are sold as such and appropriate VAT is paid.

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