SAD refund on resale remains available even when VAT or sales tax is nil, subject to notification conditions.

Refund of special additional duty under Notification No. 102/2007-Cus was treated as available where imported goods were resold and the refund conditions were otherwise satisfied. The Tribunal view and explanatory circular were applied to clarify that refund is not denied merely because the applicable VAT or sales tax on resale is nil, or lower than the SAD rate, so long as the statutory resale-linked conditions are met. SAD was described as an equitable levy in lieu of sales tax, and the refund challenge was rejected.

---

---

Issues: Whether refund of special additional duty was admissible when the imported goods were resold and the applicable VAT or sales tax rate was nil.

Analysis: The refund mechanism under Notification No. 102/2007-Cus was held to permit refund of SAD where the imported goods were resold and appropriate VAT or sales tax had been paid. Reliance was placed on the earlier Tribunal view and the explanatory circular, which clarified that the refund was not to be reduced merely because the VAT or sales tax rate was lower than the SAD rate or nil. The levy of SAD was treated as an equitable levy in lieu of sales tax, with refund linked to resale and the statutory refund conditions.

Conclusion: Refund of SAD remained admissible even where the VAT or sales tax on resale was nil, and the challenge to the refund was rejected.

---