2015 (3) TMI 510 - AT - Customs

Rejection of refund claim - SAD - Endorsement of invoice - Held that - As per the Notification no. 102/07 ibid there should be an endorsement on the invoice that the credit of SAD paid will not be available as credit to the buyer. Consequently, the refund of SAD is available to the trader/importer. Admittedly, in this case, although there is no endorsement on the invoice, the buyer is also not able to take credit as the buyer is not registered with the Central Excise department. As the buyer is not able to take credit of SAD, the condition of Notification no. 102/07 is fulfilled to entitlement of the refund of SAD. In these circumstances, the appellant is entitled for refund claim. Therefore, I set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection of 4% SAD paid due to lack of endorsement on invoice regarding credit availability to buyer under Notification no. 102/07 dated 14.09.2007.

Analysis:
The appellants contested the rejection of their refund claim for 4% SAD payment. They argued that despite not endorsing the invoice issued to an unregistered buyer, the buyer could not avail credit as they were not registered with the Central Excise department. The appellant, a small trader, imported stainless steel industrial raw material, paid proper customs duty, and 4% SAD, selling the goods locally with CST/VAT payments. The impugned order was based on the absence of the required endorsement on the invoice, as mandated by Notification no. 102/07. The Tribunal noted that although the invoice lacked the endorsement, the buyer's inability to claim credit fulfilled the notification's condition for SAD refund eligibility. Consequently, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief.

This judgment clarifies the significance of complying with notification requirements for claiming SAD refunds, emphasizing that actual credit availability to the buyer is a crucial factor. The Tribunal's decision highlights that fulfillment of conditions, rather than mere technicalities like endorsement absence, should determine refund entitlement. The case underscores the importance of considering practical implications and the actual impact on credit availability when assessing refund claims related to SAD payments.