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2021 (12) TMI 917 - AT - CustomsRefund claim of Special Additional Duty (SAD), which is in lieu of sales tax - rejection on the ground of time limitation - HELD THAT - The facts are not in dispute and admittedly, the appellant importer has filed refund claim after more than one year or may be by few days more from the date of payment of SAD. The condition of limitation was not a part of the original notification. It was only with the introduction of Circular No. 6/2008-Cus. and subsequent amending Notification No.93/2008 dated 01.08.2008, the department started insisting on the limitation period (of one year) as prescribed, with effect from 1.8.2008, became applicable. The Hon ble High Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS 2014 (4) TMI 870 - DELHI HIGH COURT has clearly held that the expression so far as may be used in the sub-section (6) of Section 3 of CTA, has to be followed to the extent possible. Merely because Section 27 of the Customs Act provides for a period of limitation for filing refund claim, it cannot be held that even for the purposes of claiming refund in terms of the Notification, the same limitation has to be applied. The Hon ble Delhi High Court has also held that in the matters which deal with substantive rights, such as imposition of penalties and other provisions, that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or Rules cannot prevail, or be made in such case. The appeal filed by the appellant is allowed - decided in favor of appellant.
Issues Involved:
1. Whether the refund claim of ‘Special Additional Duty’ (SAD) was rightly rejected as time-barred. 2. Applicability of the limitation period for refund claims under Notification No. 93/2008-Cus. 3. The legal standing of the appellant’s contention that the right to claim refund arises only upon subsequent sale and deposit of Sales Tax/VAT. 4. The relevance of the submission of duplicate copies of Bills of Entry. Issue-wise Detailed Analysis: 1. Whether the refund claim of ‘Special Additional Duty’ (SAD) was rightly rejected as time-barred: The appellant filed a refund claim for SAD amounting to ?6,48,476/- on 24.05.2018, which was beyond the one-year limitation period prescribed by Notification No. 93/2008-Cus dated 01.08.2008. The Adjudicating Authority rejected the claim on the ground of limitation, as the appellant failed to file the refund claims within one year from the date of payment of SAD. 2. Applicability of the limitation period for refund claims under Notification No. 93/2008-Cus: The appellant argued that the right to claim refund arises only upon the subsequent sale of goods in the domestic market and the deposit of Sales Tax/VAT. They relied on several rulings, including Sony India Pvt. Ltd., Purab Textile Pvt. Ltd., and International Refrigeration Corpn., which supported the view that the limitation period should commence from the date of subsequent sale and not from the date of payment of SAD. The Commissioner (Appeals) rejected this argument, relying on rulings such as CMS Info System Ltd., R.M. Impex Pvt. Ltd., and CC, Hyderabad vs. Surya Telecom Pvt. Ltd., which upheld the one-year limitation period from the date of payment of SAD. 3. The legal standing of the appellant’s contention that the right to claim refund arises only upon subsequent sale and deposit of Sales Tax/VAT: The Tribunal considered the judgment of the Delhi High Court in Sony India, which held that the right to claim refund accrues only upon subsequent sale and that imposing a limitation period from the date of payment of SAD would be unreasonable. The Delhi High Court emphasized that the exemption provided in the original notification is conditional upon subsequent sale and that the provisions of the Customs Act, including the limitation period, should be applied "so far as may be" applicable. The Tribunal found this reasoning persuasive and noted that the Bombay High Court's disagreement did not adequately address these specific findings. 4. The relevance of the submission of duplicate copies of Bills of Entry: The appellant submitted duplicate copies of two Bills of Entry instead of the original ones. They cited the case of Commissioner of Customs and C. Ex., Noida vs. Progressive Alloys (I) Pvt. Ltd., arguing that this should not be a ground for rejecting the refund claim. The Tribunal did not specifically address this issue in detail, focusing instead on the broader question of the limitation period. Conclusion: The Tribunal, following the Delhi High Court's judgment in Sony India, held that the appellant's right to claim a refund of SAD arises only upon the subsequent sale of goods. Therefore, the limitation period should not commence from the date of payment of SAD. The appeal was allowed, and the impugned order was set aside, entitling the appellant to consequential benefits in accordance with the law. The Tribunal emphasized that the condition of limitation was not part of the original notification and was only introduced later through Circular No. 6/2008-Cus. and Notification No. 93/2008-Cus. The Tribunal concluded that the expression "so far as may be" should be followed to the extent possible, and the limitation period under Section 27 of the Customs Act should not be applied to SAD refund claims.
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