By TIOL News Service

MUMBAI, APR 25, 2014: THE claims filed by the appellant seeking refund of SAD under Notification no. 102/2007-Cus dated 14.09.2007 were rejected on the ground that the endorsement as required in terms of condition 2(b) of the said Notification was not made on the invoice issued for sale of goods.

Condition 2(b) reads thus –

(b) 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 ;

The appellant submitted that they are traders issuing commercial invoices and they have cleared the imported goods on which they suffered SAD and sold on payment of CST/VAT and as no duty element has been incorporated in the invoice, therefore, taking the benefit of SAD by the buyer does not arise. Further, the SAD is payable by the assessee to safeguard CST/VAT and since the goods have been cleared on payment of CST/VAT, therefore, they are entitled to get the benefit as per the Notification no. 102/07-Cus. Reliance is placed on the decisions of the Tribunal in the case of Equinox Solution Ltd. vs. CC (Import), Mumbai – 2010-TIOL-1907-CESTAT-MUM [Single Member Bench] & Novo Nordisk India Pvt. Ltd. vs. CC (ACC & Import), Mumbai – 2013-TIOL-1944-CESTAT-MUM [Division Bench].

On the other hand, the Revenue representative relied upon the Division Bench decision in the case of Astra Zeneca Pharma India Ltd. vs. CCE, New Delhi 2013-TIOL-1946-CESTAT-DEL and submitted that the condition of the notification is to be followed strictly and in the said case, the refund claim was denied by this Tribunal.

The Bench observed –

"5. As there are two contrary decisions of his Tribunal placed before me, it would be appropriate to refer the matter to the Larger Bench of this Tribunal to resolve the following issue:-

“Whether to avail the benefit of Notification no. 102/07, the condition 2(b) of the Notification is mandatory for compliance being a trader who cleared the goods on the strength of commercial invoices."

The Registry was directed to place the matter before the President to constitute a Larger Bench to resolve the issue.

(See 2014-TIOL-639-CESTAT-MUM)