2021 (12) TMI 1363 - HC - Customs

Right to claim refund of Additional Duty of Customs paid under Section 3(5) of the Customs Tariff Act - TIME LIMITATION - can Section 27 of the Customs Act, 1962 nor Notification No.93/2008 dated 1-8-2008, impose limitation on the right to claim refund? - limitation of one year for claiming refund of Additional Duty of Customs paid under Section 3(5) of the Customs Tariff Act would commence from the date of sale or from payment of duty contrary to the Notification No.93/2008 dated 1-8-2008 issued in exercise of powers under Section 25(1) of the Customs Act 1962? HELD THAT - The issue involved herein is no more res integra in view of the order passed by this Court in THE COMMISSIONER OF CUSTOMS, BANGALORE VERSUS M/S. MOLEX INDIA PVT. LTD. 2021 (10) TMI 342 - KARNATAKA HIGH COURT , whereby the Co-ordinate Bench of this Court (Hon ble SSJ was a member) has categorically observed that neither Section 27 of the Act of 1962 nor a notification under Section 25(1), such as the amended notification No.93/2008-Cus can be used to impose a limitation period and the right to claim refund. In the present case, the contention of the Revenue that the period of one year during the relevant period is the period of limitation prescribed under Section 27 of the Act of 1962 for refund of claim as per Notification No.102/2007 is wholly untenable for the reason that the refund of SAD would be claimed by the assessee subsequent to completion of the assessment. In many cases, as the SAD would be refundable only on subsequent sale, which is not in the control of the assessee. It is, thus, clear that no limitation period can possibly be imposed for advancing a refund claim, since SAD levied under Section 3(5) of the Customs Tariff Act, 1975 is refundable only on completion of subsequent sale. Given the vagaries of the market, the importer has limited control over the sale when it would be complete. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal filed by Revenue under Section 130 of the Customs Act, 1962 against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
2. Substantial questions of law regarding the limitation on the right to claim refund of Additional Duty of Customs paid under Section 3(5) of the Customs Tariff Act.
3. Interpretation of Section 27 of the Customs Act, 1962 and Notification No.93/2008 in imposing a limitation period for claiming refund.
4. Comparison with a previous judgment in the case of Commissioner of Customs Vs. M/s Molex India Private Limited.
5. Upholding the Tribunal's order and dismissing the appeal by the Revenue.

Analysis:

1. The appeal before the Karnataka High Court was filed by the Revenue under Section 130 of the Customs Act, 1962, challenging the final order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated 25.10.2019, which had dismissed the Revenue's appeal.

2. The Court admitted the appeal to consider substantial questions of law related to the limitation on claiming a refund of Additional Duty of Customs paid under Section 3(5) of the Customs Tariff Act. The questions revolved around the applicability of Section 27 of the Customs Act, 1962 and Notification No.93/2008 in imposing limitations on refund claims.

3. The Court referred to a previous judgment in the case of Commissioner of Customs Vs. M/s Molex India Private Limited, where it was observed that neither Section 27 of the Act of 1962 nor a notification under Section 25(1) could impose a limitation period on the right to claim a refund. The Court highlighted that the refund of Special Additional Duty (SAD) is claimable only after the completion of subsequent sales, which may not be under the control of the assessee.

4. Based on the reasoning provided by the Tribunal and the precedent set by the previous judgment, the Court declined to interfere with the Tribunal's order. It noted that there was no perversity or irregularity in the impugned order and, therefore, answered the substantial questions of law in favor of the assessee and against the Revenue.

5. Consequently, the Court dismissed the appeal, affirming the Tribunal's decision and ruling in favor of the assessee. The judgment emphasized the inability to impose a limitation period for advancing a refund claim of SAD under the Customs Tariff Act, considering the uncertainties in the market and the importer's limited control over subsequent sales.