SAD refund under Notification 102/2007-Cus. survives processing and minor invoice defects when substantive conditions are met.

Refund of special additional duty under Notification No. 102/2007-Cus. is not defeated merely because imported timber logs are cut and sawn before sale, so long as the goods retain their identity and are subsequently sold. The invoice endorsement requirement is aimed at preventing inadmissible credit; where the claimant is not a registered dealer, manufacturer, or service provider, the absence of the endorsement is only a technical defect and does not bar refund. Minor discrepancies in description, pieces, or omission of Bill of Entry numbers do not justify recovery where stock reconciliation and other records establish correlation between imported goods, sale invoices, and duty payment. The refund recovery demand and connected penalty were therefore not sustainable.

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Issues: (i) Whether refund of special additional duty under Notification No. 102/2007-Cus. can be denied because imported timber logs were cut and sawn before sale; (ii) whether refund can be denied for want of invoice endorsement that credit of SAD under Section 3(5) of the Customs Tariff Act, 1975 was not admissible, when the claimant was not a registered dealer; and (iii) whether minor discrepancies in description, pieces, and non-mention of Bill of Entry numbers in the invoices justified recovery of the refund.

Issue (i): Whether refund of special additional duty under Notification No. 102/2007-Cus. can be denied because imported timber logs were cut and sawn before sale.

Analysis: The controlling principle was that the notification contemplates import for subsequent sale and does not require the goods to be sold in the exact form in which they were imported. The imported logs retained their identity despite being reduced in size and converted into sawn timber. The precedent relied upon had already held that such conversion does not defeat the exemption/refund benefit, provided the original product identity is not lost.

Conclusion: Refund could not be denied on the ground that the timber logs were cut and sawn before sale; this objection failed.

Issue (ii): Whether refund can be denied for want of invoice endorsement that credit of SAD under Section 3(5) of the Customs Tariff Act, 1975 was not admissible, when the claimant was not a registered dealer.

Analysis: The condition in the notification requiring an invoice endorsement is directed at preventing availment of credit by the buyer. Where the claimant was not a registered dealer, manufacturer, or service provider, no question arose of credit being taken on its invoices. The purpose of the condition was thus already satisfied in substance, and the objection was technical rather than substantive.

Conclusion: The absence of the endorsement did not disentitle the claimant to refund; the objection failed.

Issue (iii): Whether minor discrepancies in description, pieces, and non-mention of Bill of Entry numbers in the invoices justified recovery of the refund.

Analysis: The record showed that the claimant had produced stock reconciliation and Chartered Accountant-certified documents. Minor variations between the import documents and sale invoices were not sufficient to invalidate the refund claim when the core requirement of correlation between imported goods, sold goods, and duty paid had been established. Such discrepancies were treated as insufficient to defeat a refund claim under the notification.

Conclusion: Minor discrepancies did not justify recovery of the refund; this objection also failed.

Final Conclusion: The refund recovery demand and the connected penalty could not be sustained, and the appeals were allowed.

Ratio Decidendi: Under Notification No. 102/2007-Cus., refund of SAD cannot be denied where imported goods are sold after processing that does not destroy their identity, and technical or minor documentary discrepancies do not defeat the claim when the substantive conditions are satisfied.

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