2015 (3) TMI 1074 - AT - Customs

Denial of refund of SAD - Bar of limitation - whether the appellants are eligible for refund of SAD claimed in respect of timber imported and sold by them in the domestic market - Held that - in addition to non admissibility analysis relating to cenvat credit, another ground had been taken for rejecting the refund claim. This ground is that refund claims were not filed within one year from the date of payment of SAD to Customs Department. In the case of Indian Timbers, date of payment of duty was 13.05.2008 and date of filing the refund claim is 13.05.2009. According to General Clauses Act, for calculation of one year, the date on which duty was paid has to be omitted since it has to be calculated from the date of payment . Once it is done, the calculation of one year period has to be made from 14.05.2008 and in such a case the claim has to be considered as filed on the date on which one year would have been over. Therefore the claim has to be considered as filed within the period of limitation - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for refund of SAD claimed in respect of timber imported and sold in the domestic market.
2. Non-declaration of cenvatability and the conversion factor as grounds for rejecting the refund claim.
3. Timeliness of filing refund claims within one year from the date of payment of SAD to Customs Department.

Analysis:

Issue 1:
The main issue in all the cases revolved around the eligibility of the appellants for a refund of Special Additional Duty (SAD) claimed on timber imported and sold in the domestic market. The rejection of the claims was based on the appellants' failure to declare in the invoice for domestic sales that the purchaser could not avail cenvat credit. Both parties agreed that the matter was covered by a decision of the Larger Bench in Chowgule & Company Pvt. Ltd. Vs. CC & C.Ex., where it was held that the endorsement on the invoice was a procedural requirement and the purpose could be achieved even without specifying the duty element in the invoice. The Tribunal concluded that the absence of the endorsement did not undermine the exemption's purpose. The appellants argued that since no tax element was separately indicated, similar to the case considered by the Tribunal Larger Bench, the appeals should be allowed on this issue.

Issue 2:
In the appeal filed by V.U.S Timbers, apart from the non-declaration of cenvatability, the conversion factor was cited as another ground for rejecting the refund claim. However, this issue had been addressed in a recent order in the case of M/s. E. Oriental Timbers and others, and it was also covered by a previous decision of the Tribunal in CC, Mangalore Vs. Royal Timbers. Therefore, the impugned order could not be sustained on this ground as well.

Issue 3:
In Appeal No. C/1582/2011, another ground for rejecting the refund claim was the failure to file the claim within one year from the date of payment of SAD to the Customs Department. The General Clauses Act stipulates that for calculating one year, the date of duty payment should be omitted, and the period should be calculated from the next day. Applying this principle, the claim filed on 13.05.2009, one day after the one-year mark from the payment date of 13.05.2008, should be considered as filed within the limitation period. Consequently, the appeal was allowed on this basis.

In conclusion, all the appeals were allowed based on the issues discussed, with any consequential relief granted to the appellants.