SAD refund conditions under import notification: missing invoice endorsement and minor description differences did not defeat the claim.

For SAD refund under Notification No. 102/2007-Cus., absence of the endorsement on a trader-importer's commercial invoices was not, by itself, a valid basis to deny relief where SAD was paid on import, VAT was discharged on resale, and the other documentary conditions were met. Rejection of the Chartered Accountant's certificate was unsustainable because its purpose was to establish correlation between SAD paid and VAT paid, and that correlation was undisputed. A difference between the Bills of Entry and sales invoices was treated as only a minor trade-description variation, not proof of sale of different goods, so the refund claim could not be rejected on that ground.

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Issues: (i) whether refund of SAD under Notification No. 102/2007-Cus. could be denied for want of endorsement on the sales invoices as required by condition 2(b); (ii) whether rejection of the Chartered Accountant's certificate was justified on the ground that it recorded compliance with the endorsement requirement; and (iii) whether mismatch between the descriptions in the Bills of Entry and the sales invoices justified denial of refund.

Issue (i): whether refund of SAD under Notification No. 102/2007-Cus. could be denied for want of endorsement on the sales invoices as required by condition 2(b).

Analysis: A trader-importer issuing commercial invoices is not in the position of a manufacturer issuing excise invoices. The larger bench ruling in Chowgule & Company was applied to hold that absence of the prescribed endorsement on commercial invoices, by itself, does not defeat the benefit of the notification where SAD has been paid on import and VAT has been discharged on subsequent sale, subject to the other conditions being met.

Conclusion: Non-fulfilment of condition 2(b) was not a valid ground to reject the refund.

Issue (ii): whether rejection of the Chartered Accountant's certificate was justified on the ground that it recorded compliance with the endorsement requirement.

Analysis: The certificate was required to establish correlation between VAT paid on resale and SAD paid on import under the notification and the Board circular. There was no dispute that such correlation existed. The certificate was rejected only because it mentioned endorsement compliance, but that defect did not undermine its substantive purpose.

Conclusion: Rejection of the refund on the basis that the Chartered Accountant's certificate was unacceptable was unsustainable.

Issue (iii): whether mismatch between the descriptions in the Bills of Entry and the sales invoices justified denial of refund.

Analysis: The descriptions in the invoices used trade names, while the Bills of Entry contained fuller technical descriptions. The character of the goods as paper remained identifiable, and the variation was treated as a minor difference in trade description rather than a discrepancy showing that different goods were sold. The cases relied upon by the assessee supported grant of refund in such circumstances.

Conclusion: The alleged mismatch in description did not justify rejection of the refund claim.

Final Conclusion: The refund rejection was set aside and the appeals succeeded with consequential relief under the notification.

Ratio Decidendi: For SAD refund under Notification No. 102/2007-Cus., a trader-importer's commercial invoices need not bear the endorsement contemplated for other cases if the substantive conditions of import, resale, VAT payment, and documentary correlation are satisfied, and a minor trade-description mismatch does not defeat the claim.

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