2021 (7) TMI 1455 - HC - Customs

Refund of the SAD - rejection of claims in respect of the imports through Chennai Customs - rejection of claims on the ground that the claims are time barred - HELD THAT - The rejection of the claims on the ground of limitation is clearly unacceptable for the reasons that the Commissioner (Appeals) has set out the correct position of law in this regard. The Delhi High Court in the case of SUN PHARMACEUTICAL INDUSTRIES LTD. VERSUS UNION OF INDIA 2016 (8) TMI 1515 - DELHI HIGH COURT has held that there would be no limitation applicable for the filing of refund applications and the 2018 circular issued by the Board also supports this position. The orders of the Commissioner dated 02.11.2018 have attained finality, the Revenue acceding to the position of law stated and applied therein. The impugned orders rejecting the refund applications on the bar of limitation fail, and are set aside. The matter is restored to the file of the respondent for consideration on merits and shall be disposed, after hearing the petitioner, within a period of eight (8) weeks from today. Petition allowed.

Summary

Issues:
- Refund of Special Additional Duty (SAD) for imported consignments through different customs locations
- Rejection of refund claims by Chennai Customs on the grounds of limitation
- Applicability of time limit for filing refund applications

Analysis:
The petitioner, an importer, sought a refund of Special Additional Duty (SAD) for consignments imported through Inland Container Depot (ICD) at Bangalore and Chennai Customs between October 2015 and September 2016. While the refund was allowed for imports through ICD Bangalore, the claims for imports through Chennai Customs were rejected. The Commissioner (Appeals) upheld the rejection but advised the petitioner to approach Chennai Customs for refunds without any time limit for filing such applications, citing a Delhi High Court decision and a Circular by the Central Board of Indirect Taxes and Customs. Subsequently, the petitioner filed a refund application for Chennai imports, which was rejected as time-barred based on a notification from 2007. However, the rejection was deemed incorrect as the Delhi High Court and a Circular by the Board supported the absence of a time limit for filing refund applications.

The High Court emphasized that the rejection of refund claims based on limitation was unacceptable, given the legal position established by the Commissioner (Appeals) and supported by the Delhi High Court and the Circular. The Court cited a case involving Sony India Pvt. Ltd., where it was clarified that the imposition of a time limit through notification without statutory amendment could not prevail. Additionally, since the Commissioner's orders had been accepted by the Revenue, the impugned orders rejecting the refund applications based on limitation were set aside. The matter was remanded to the respondent for consideration on merits, with a direction to dispose of the issue after hearing the petitioner within eight weeks.

In conclusion, the writ petition was allowed, and no costs were imposed. The judgment highlighted the importance of adhering to established legal positions regarding the time limit for filing refund applications, emphasizing the need for statutory clarity and adherence to substantive rights in matters affecting statutory rights and obligations.