Refund of special additional duty remains admissible when subsequent sale is taxed at nil VAT under the customs notification.

Refund of special additional duty on imports under Notification No. 102/2007-Customs was held admissible where the subsequent sale attracted nil or zero sales tax/value added tax. The Tribunal applied the scheme as requiring payment of appropriate VAT or sales tax on the post-import sale and followed its earlier view that tax paid at a nil rate satisfies that requirement. Denial of refund solely because the sale was taxed at nil rate was not sustainable, and the assessee's refund claim succeeded.

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Issues: Whether refund of special additional duty paid on import was admissible when the subsequent sale of the goods suffered nil or zero sales tax/value added tax under Notification No. 102/2007-Customs dated 14.09.2007.

Analysis: The refund scheme under the notification was applied to sales made after import on payment of appropriate VAT or sales tax. The Tribunal followed its earlier view that payment of tax at a nil rate also satisfies the requirement of appropriate tax payment on the subsequent sale. Since the same issue had already been decided in the assessee's favour in its own case, the denial of refund on the sole ground of nil tax rate was not sustainable.

Conclusion: The refund of special additional duty was admissible even where the subsequent sale attracted nil sales tax or value added tax, and the assessee succeeded.

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