Case Law Details
SAD Refund cannot be denied when no endorsement to the effect that ‘No Cenvat credit of SAD is admissible’ is made on an invoice issued to the non-registered buyer as no credit is available to the buyer on account of non-registration
Vijay Steel Industries (the Appellant) is a small trader who, imported stainless steel industrial raw material (the goods) on payment of proper customs duty and 4%Special Additional Duty of Customs (SAD) under Section 3(5) of the Customs Tariff Act, 1975 and subsequently domestically sold such goods on payment of CST/ VAT. They were issuing invoice to the buyers making an endorsement that the credit of SAD will not be available. However, in respect of one buyer,who is not registered with the Central Excise Department, the Appellant did not make endorsement on the invoice with regard to the fact that Cenvat credit is not available to the buyer being non-registered assessee.
Thereafter, the Appellant filed refund of SAD under Notification No. 102/2007-Customs dated September 14, 2007 (the Notification) which was rejected by the Department on the ground that the endorsement to the effect that ‘No Cenvat credit of the SAD is admissible’ in respect of the goods covered therein, as required in terms of the Notification was not made on the invoice issued for sale of the goods.Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai.
The Hon’ble CESTAT, Mumbaiheld that although there is no endorsement on the invoice, the buyer is also not able to take Cenvat credit as the buyer is not registered with the Central Excise Department and as the buyer is not able to take Cenvat credit of SAD, the condition of the Notification is fulfilled to entitlement of the refund of SAD. Accordingly, the Hon’ble Tribunal allowed the appeal and held that the Appellant is entitled for refund of SAD.
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Even if the buyer is registered with Central Excise and the Invoice issued does not have endorsement that the credit of Additional Duty u/s 3(5) of CTA’75 is not admissible, the refund cannot be denied if the SAD is not shown in the Invoice among duties which have been passed on.