SAD refund eligibility: payment through scrips does not bar refund, and subordinate authorities must follow binding precedent.

Refund of special additional duty under Notification No. 102/2007-Cus is available where imported goods are sold on payment of VAT and no CENVAT credit is taken, and payment of SAD through scrips does not by itself defeat the claim. The text also states that a lower appellate authority cannot disregard binding High Court precedent by treating it as distinguishable without a valid legal basis, because a subordinate forum must follow superior court rulings rather than reassess their correctness. On that basis, the denial of refund is described as unsustainable and consequential relief as due.

---

---

Issues: Whether refund of special additional duty under Notification No. 102/2007-Cus dated 14.09.2007 could be denied on the ground that the duty was paid through scrips and not in cash, and whether the lower appellate authority could refuse to follow the binding judgment of the High Court.

Analysis: The refund notification permits refund of SAD where the imported goods are subsequently sold on payment of VAT and no CENVAT credit is taken. The earlier High Court ruling relied upon had held that payment of SAD through scrips does not by itself bar refund. The appellate authority declined to follow that ruling by suggesting that it was distinguishable because certain circulars and a DGFT public notice were not considered. Such an approach was found impermissible, as an authority subordinate in hierarchy must follow the precedent of a superior court and cannot sit in judgment over its correctness.

Conclusion: The denial of refund was unsustainable, and the appeal was allowed.

Final Conclusion: The assessee was held entitled to refund of the SAD along with consequential relief.

Ratio Decidendi: A subordinate appellate authority must follow binding precedent of a superior court and cannot deny refund under a notification on a ground rejected by that precedent merely because it disagrees with the reasoning or considers the precedent distinguishable without legal basis.

---