SAD refund under Notification 102/2007-Cus. cannot be denied for missing invoice endorsement or NIL/exempt VAT.

Refund of Special Additional Duty under Notification No. 102/2007-Cus. was analysed on two points: first, the absence of a commercial invoice endorsement that CENVAT credit had not been availed did not by itself defeat refund where the other notification conditions were satisfied; second, refund remained admissible where the applicable VAT was NIL or exempt, because payment of appropriate sales tax or VAT was treated as satisfied in that situation. The settled view and the cited circular also indicated that refund of the additional duty could not be curtailed merely because the VAT rate was below 4%. The impugned rejection of refund was therefore held unsustainable, with consequential relief.

---

---

Issues: (i) Whether refund of Special Additional Duty could be denied for want of an endorsement on the commercial invoices that CENVAT credit was not availed; (ii) whether refund under Notification No. 102/2007-Cus. was admissible where VAT was NIL or exempt on the imported goods.

Issue (i): Whether refund of Special Additional Duty could be denied for want of an endorsement on the commercial invoices that CENVAT credit was not availed.

Analysis: The Tribunal followed the Larger Bench ruling that entitlement to refund under the notification is not defeated merely because the commercial invoices do not contain a specific endorsement about non-availment of credit, so long as the other conditions of the notification are satisfied.

Conclusion: The absence of the endorsement did not by itself disentitle the assessee from refund.

Issue (ii): Whether refund under Notification No. 102/2007-Cus. was admissible where VAT was NIL or exempt on the imported goods.

Analysis: The Tribunal applied the settled view that the notification requires payment of appropriate sales tax or VAT, and where the applicable VAT is NIL or exempt, that condition is still satisfied. The cited circular also clarified that refund of the full additional duty is not to be curtailed merely because the sales tax or VAT rate is lower than 4%.

Conclusion: Refund of Special Additional Duty was admissible even though VAT was NIL or exempt.

Final Conclusion: The impugned rejection of refund was unsustainable and the assessee was entitled to the claimed SAD refund with consequential relief.

Ratio Decidendi: Refund of Special Additional Duty under Notification No. 102/2007-Cus. cannot be denied for want of an invoice endorsement if the substantive conditions are met, and the requirement of payment of appropriate sales tax or VAT is satisfied even where the applicable VAT rate is NIL or exempt.

---