Refund of Special Additional Duty cannot be denied for missing invoice endorsement when VAT is paid on resale and compliance is otherwise shown.

Refund of Special Additional Duty under Notification No. 102/2007-Cus. cannot be denied solely for absence of the invoice endorsement that credit of duty is not admissible, where the trader-importer paid SAD on import and later discharged VAT/Sales Tax on resale. The Tribunal followed the Larger Bench view that substantive compliance with the notification is sufficient if the other conditions are met, and that a statutory auditor's certificate correlating VAT paid on sale with SAD paid on import is relevant evidence of compliance. Rejection of refund only for want of the prescribed endorsement was held unsustainable, and refund was allowed.

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Issues: Whether refund of Special Additional Duty could be denied for non-compliance with the invoice endorsement condition under Notification No. 102/2007-Cus., where the trader-importer paid SAD on import and discharged VAT/Sales Tax on subsequent sale.

Analysis: The notification was applied in the light of the Larger Bench ruling that a trader-importer who has paid SAD and subsequently discharged VAT/Sales Tax on resale is entitled to refund even if the commercial invoices do not contain the specific endorsement that credit of duty is not admissible, provided the other conditions of the notification are satisfied. The Tribunal also followed the view that the statutory auditor's certificate showing correlation between VAT on sale and SAD paid on import is relevant to establish compliance, and that rejection of refund solely for absence of the endorsement is not legally sustainable.

Conclusion: The refund could not be denied merely because the commercial invoices did not contain the prescribed endorsement, and the assessee was entitled to refund under the notification.

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