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2022 (3) TMI 1176 - AT - CustomsRefund claim of Special Additional Duty (SAD) - 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 appellant is entitled to the refund as their right to claim refund of duty in terms of the Notification has accrued only when the sale took place after import. The findings of the Hon ble Delhi High Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS 2014 (4) TMI 870 - DELHI HIGH COURT clearly show understanding of the department with regard to clause of limitation provided in the Notification. The condition of limitation was not the part of the original notification. It was only with the introduction of Circular No. 6/2008-Cus. and Notification No.93/2008 the department started insisting on the limitation period (of one year) prescribed with effect from 1.8.2008 became applicable - 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. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the refund claim of Special Additional Duty (SAD) under the Customs Act, which is in lieu of sales tax, was rightly rejected as time-barred by the lower court. 2. Whether the right to claim refund of SAD arises only on subsequent sale of imported goods. 3. The applicability of the limitation period for filing a refund claim under the Customs Act. 4. The submission of duplicate copies of Bills of Entry instead of original ones and the violation of principles of natural justice. Issue-wise Detailed Analysis: 1. Rejection of Refund Claim as Time-Barred: The appellant's refund claims for SAD were rejected by the Adjudicating Authority on the grounds that they were filed beyond the period of one year from the date of payment of SAD, as stipulated in Notification No. 93/2008-Cus. The claims were based on bills of entry dated 20.12.2012 and 18.01.2013, but the refund claims were filed on 25.10.2016 and 22.01.2014, respectively. The lower court held that the appellant failed to file refund claims within the prescribed one-year period, thus rendering them time-barred. 2. Right to Claim Refund on Subsequent Sale: The appellant argued that the right to claim refund of SAD crystallizes only upon the subsequent sale of imported goods in the domestic market and the payment of sales tax/VAT. They contended that the limitation period should start from the date of such subsequent sale, not from the date of payment of SAD. The appellant relied on the rulings in Sony India Pvt. Ltd. (2014) and other similar cases, which held that the right to claim refund arises only on subsequent sale. 3. Applicability of Limitation Period: The Commissioner (Appeals) and the Revenue relied on the amended Notification No. 93/2008-Cus, which introduced a one-year limitation period from the date of payment of SAD. They cited rulings such as CMS Info System Ltd. (2017) and CC, Hyderabad vs. Surya Telecom Pvt. Ltd. (2018) to support the applicability of this limitation period. However, the appellant argued that the limitation period could not start before the right to claim refund had accrued, as upheld by the Delhi High Court in Sony India. 4. Submission of Duplicate Bills of Entry: The appellant submitted duplicate copies of Bills of Entry for two refund claims instead of the original ones. They cited the case of Commissioner of Customs and C. Ex., Noida vs. Progressive Alloys (I) Pvt. Ltd. (2017) to argue that this should not be a ground for rejection of the refund claim. Additionally, the appellant raised the issue of violation of principles of natural justice. Judgment Analysis: The Tribunal considered the rival contentions and found that the facts were not in dispute. The appellant had filed the refund claims after more than one year from the date of payment of SAD. The Tribunal referred to the Delhi High Court judgment in Sony India, which held that the right to claim refund accrues only on subsequent sale, and thus, no limitation period could be imposed before the right had accrued. The Tribunal noted that the Bombay High Court in CMS Info System Ltd. disagreed with this view but did not disturb the specific findings of the Delhi High Court regarding the accrual of the right to claim refund and the applicability of the limitation period. The Tribunal concluded that the appellant's right to claim refund of SAD accrued only when the sale took place after import. Therefore, the limitation period could not start from the date of payment of SAD. The Tribunal held that the appellant was entitled to the refund, following the Delhi High Court's judgment in Sony India. Conclusion: The Tribunal allowed the appeal, set aside the impugned order, and granted the appellant consequential benefits in accordance with the law. The order was pronounced in open court.
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