SAD refund under customs notification: invoice non-disclosure of duty element satisfied the endorsement condition for a trader

For a trader claiming refund of SAD under Notification No. 102/2007-Customs, the Tribunal held that the invoice-endorsing condition in para 2(b) was not mandatory where the commercial invoice did not disclose any duty element. It followed the Larger Bench view that, in such a case, the question of availing CENVAT credit does not arise and the purpose of the notification condition is met by non-disclosure of the duty element in the invoice. The rejection of refund was set aside, and the trader was held entitled to refund with consequential relief.

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Issues: Whether the condition in para 2(b) of Notification No. 102/2007-Customs requiring endorsement on invoices that no credit of the additional duty of customs would be admissible was mandatory in the case of a trader claiming refund of SAD.

Analysis: The Tribunal followed the Larger Bench view that where an importer is only a trader and the commercial invoice itself does not disclose any duty element, the question of availing CENVAT credit does not arise. Non-declaration of the duty element in the invoice was treated as satisfying the purpose of the notification condition, and the strict-mandatory construction urged by the Revenue was held inapplicable on the facts.

Conclusion: The condition in para 2(b) was not mandatory for a trader in the circumstances of the case, and the appellant was held entitled to refund.

Final Conclusion: The rejection of refund was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: For a trader claiming SAD refund under Notification No. 102/2007-Customs, non-disclosure of the duty element in the commercial invoice can amount to compliance with the endorsement condition, and the condition is not to be treated as mandatory in such cases.

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