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Issues: (i) whether refund of special additional duty could be denied on the ground that transfer of the goods on right-to-use basis did not amount to sale and VAT had not been validly discharged; (ii) whether refund could be rejected because the invoices did not bear the endorsement that Cenvat credit was not admissible.
Issue (i): whether refund of special additional duty could be denied on the ground that transfer of the goods on right-to-use basis did not amount to sale and VAT had not been validly discharged.
Analysis: The invoices were examined and the goods were described as STB. The claim was that the goods were transferred on a right-to-use basis, which amounts to deemed sale, and VAT had been paid accordingly. Reliance was placed on the appellant's own earlier case, which had already held that transfer of the right to use goods constitutes deemed sale and that discharge of VAT would satisfy the refund condition.
Conclusion: The denial of refund on this ground was unjustified and the appellant was eligible for refund.
Issue (ii): whether refund could be rejected because the invoices did not bear the endorsement that Cenvat credit was not admissible.
Analysis: The invoices were found to state that Cenvat credit was not passed on and that no Cenvat credit was admissible. In the absence of any material showing that credit had been availed or passed on, the objection based on endorsement was not sustained.
Conclusion: The rejection of refund on this ground was unjustified and the appellant was eligible for refund.
Final Conclusion: The refund claim satisfied the statutory conditions and the appeals succeeded with consequential relief.
Ratio Decidendi: Where the transfer of goods is on a right-to-use basis amounting to deemed sale and the invoices establish that Cenvat credit was not passed on, refund under the relevant notification cannot be denied on those grounds.
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