SAD refund cannot be denied on hyper-technical correlation doubts when documents prove imported goods were sold and conditions were met

Refund of Special Additional Duty under Notification No. 102/2007-Cus. cannot be denied merely because invoice descriptions create a hyper-technical correlation issue, where the documentary record, including invoices, a Chartered Accountant's certificate, and proof of sales tax/VAT payment, establishes that the imported goods were the same goods sold and the refund conditions were otherwise satisfied. The commentary also notes that an order passed by a successor authority without giving the assessee an effective post-transfer hearing is inconsistent with fairness in adjudication. On these grounds, the refund claim was restored with consequential relief.

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Issues: (i) Whether refund of 4% Special Additional Duty under Notification No. 102/2007-Cus. dated 14.09.2007 could be denied on the ground of alleged inability to correlate imported goods with the sold goods. (ii) Whether the impugned appellate order was sustainable when the assessee was not afforded an effective opportunity after change of authority.

Issue (i): Whether refund of 4% Special Additional Duty under Notification No. 102/2007-Cus. dated 14.09.2007 could be denied on the ground of alleged inability to correlate imported goods with the sold goods.

Analysis: The refund had originally been sanctioned after verification of the relevant documents and on application of the unjust enrichment test. The appellate authority's objection that correlation between imported and sold goods was difficult was not accepted, as the record showed that the necessary verification had already been carried out through invoices, Chartered Accountant's certificate, and the finding on payment of sales tax/VAT. The description issue was also held not to justify denial of the substantive refund benefit where the very same goods had been sold.

Conclusion: The rejection of refund was unsustainable and the assessee was entitled to the refund.

Issue (ii): Whether the impugned appellate order was sustainable when the assessee was not afforded an effective opportunity after change of authority.

Analysis: Although a personal hearing had earlier been offered, the matter was decided on merits by a successor authority without providing an opportunity to the assessee after the change, which was treated as contrary to fairness in adjudication.

Conclusion: The impugned order was not sustainable on this ground as well.

Final Conclusion: The refund claim was restored and the assessee succeeded in the appeal with consequential relief as permissible in law.

Ratio Decidendi: Refund under the notified SAD scheme cannot be denied merely on a hyper-technical mismatch in invoice description or alleged correlation difficulties when the documentary record establishes that the imported goods were the very goods sold and the refund conditions were otherwise satisfied.

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