SAD refund on local sale upheld where VAT was paid through proprietorship concerns of the same owner with one registration.

Refund of Special Additional Duty under Notification No. 102/2007-Customs was admissible where imported goods were sold in India and VAT was paid through two sole proprietorship concerns of the same individual holding a single VAT registration. The VAT authorities had certified that only one TIN could be issued to that proprietor, and the challans naming both concerns did not negate VAT payment on the local sale. On those facts, the notification was held to be substantially complied with, the objection that the concerns were separate entities was rejected, and the refund was upheld in favour of the assessee.

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Issues: Whether refund of Special Additional Duty was admissible under Notification No. 102/2007-Customs where the imported goods were sold in India on payment of VAT through concerns having a common proprietor and a single VAT registration number.

Analysis: The respondent established that both concerns were sole proprietorships of the same individual and that the Commercial Tax Officer had certified registration under the Karnataka Value Added Tax Act, 2003 with a single TIN for the businesses owned by him. The VAT authorities' endorsement showed that one individual could have only one TIN and no separate TIN could be issued for the same proprietor's business concerns. In that background, the VAT payment challans reflecting both concern names did not disprove payment of VAT on the local sale of the imported goods, and the conditions of the refund notification were held to be substantially complied with.

Conclusion: The objection that the concerns were separate entities was rejected and the refund of SAD was held admissible in favour of the assessee.

Final Conclusion: The Department's challenge failed and the order allowing refund of SAD was upheld.

Ratio Decidendi: Where the buyer and VAT-paying concern are proprietorships of the same person holding a single VAT registration, refund under the SAD refund notification cannot be denied merely because the challans and invoices reflect different concern names, if VAT payment on local sale is otherwise established and the notification is substantially complied with.

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