CESTAT Mumbai Orders Refund of SAD

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, has ruled in favor of Varian Medical Systems International (India) Pvt. Ltd., ordering the refund of Special Additional Duty (SAD) amounting to ₹2,87,801. The appeal arose after the refund was rejected by both the original authority and Commissioner (Appeals) on the ground that the duty was paid by DHL and not by the appellant.

Case Summary

Appellant: Varian Medical Systems International (India) Pvt. Ltd.
Refund Claim: ₹2,87,801/- for SAD under three Bills of Entry dated April–June 2017
Original Authority’s Rejection: Claimed refund was rejected on the ground that the SAD was paid by DHL
Ground for Appeal: TR-6 challans showed the appellant’s name as importer, proving they bore the duty burden

Tribunal’s Key Findings

Evidence of Duty Payment Established
The Tribunal examined multiple TR-6 challans (pages 12, 16, 21, and 25 of the appeal book) which clearly listed Varian Medical Systems as the importer and payer of duty.
Rejection Based on Mere Assumption Invalid
The only basis for rejection was the assumption that since DHL facilitated clearance, the duty wasn’t paid by the importer. The Tribunal held this was incorrect as the clearing agent merely facilitated payments from a running account.
Legal Recognition of TR-6 Challans
The TR-6 challans were held to be valid evidence of incidence of duty, establishing the appellant’s eligibility for refund.

Final Order

The impugned Order-in-Appeal dated 06.12.2021 was set aside
The original authority was directed to refund the SAD amount of ₹2,87,801/-
The appeal was allowed in full

Legal Significance

This decision reiterates:

TR-6 challans with the importer’s name are sufficient to prove duty payment
Rejections based on the courier or customs broker’s involvement are not legally sustainable
Upholds the principle that VAT-paid post-import sales entitle importers to SAD refunds, provided documentation is in order

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Source: CESTAT Mumbai

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