Special Additional Duty of Customs (SAD) Refund

Ministry of Finance issued a Notification No.102/2007-Customs dated 14.09.2007 to clarify certain points as to refund of the Special Additional Duty of Customs one of such clarification is contained in Point 2(b) which reads as follows.

"the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;"

Hence the notification made it mandatory to incorporate the above declaration in the sales invoice of the assessee for granting refund of Special Additional Duty of Customs.

As is the general practice the Tribunals and courts take a liberal view on the notifications and they always are of the opinion that the notications have to be intepreted liberally and circumstantial evidence if they are very strong the and if there is positive intention on the part of the assessee then even if some "technical lapses" are evident the Tribunals and Courts overlook them and favour the assessee.

Similarly interpreting the above clause 2(b) cited in notification No.102/2007-Customs the Mumbai Tribunal has recently passed 2 judgements

        [2011 (272) ELT 287 (Tri-Mumbai)] and

[2011 (272) ELT 310 (Tri-Mumbai)]

In the above orders the Tribunal has held that the assessee has not charged or shown the Special Additional Duty in the invoice buy failed to incorporate the declaration as given in condition 2(b) the assessee is still elibgible for availing of refund of the Special Additional Duty.  Further the Tribunal observed that there is a Chartered Accountant Certificate which specifically proves the payment of VAT / CST liability and hence the declaration is not mandatory to avail refund of Special Additional Duty.

The views of Tribunals and Courts are more welcome, however this is absent till Commissioner (Appeals) level, which leads to increase in litigations reaching higher judicial authorities, which can be very well avoided.