2024 (6) TMI 290 - AT - Customs

Time limitation of one year for refund of Additional Duty of Customs - N/N. 102/2007-Cus dated 14.09.2007, as amended by N/N. 93/2008-Cus dated 01.08.2008 - rejection on the ground that refund claims were not filed within one year from the date of payment of duty as required under the Notification - HELD THAT - The Commissioner (Appeals) has upheld the order passed by the Assistant Commissioner holding that the condition stipulated the Notification, which cannot be considered to be merely procedural, were not complied and the judgment of the Delhi High Court in Sony India 2014 (4) TMI 870 - DELHI HIGH COURT has been distinguished for the reason that it was a case relating to the period prior to the amendment made in the Notification dated 14.09.2007 by Notification dated 01.08.2008 whereas the present matters relate to imports made after the amendment was made by Notification dated 01.08.2008 which provides that the claim for refund of Additional Duty has to be filed before the expiry of one year from the date of payment of the Additional Duty. The provisions of the Notification dated 14.09.2007 as amended on 01.08.2008 and the aforesaid provisions of the Tariff Act and the Customs Act were examined by the Delhi High Court in Sony India. It was held that since Additional Duty levied under section 3(5) of the Tariff Act is refundable only on a subsequent sale, no limitation can possibly be imposed for filing a refund claim from the date of payment of such Additional Duty - the High Court concluded that the period of limitation contemplated under section 27 of the Customs Act would not be applicable to a refund made under the Notification dated 14.09.2007 as amended by Notification dated 01.08.2008, more particularly when the customs authority also understood that section 27(1) of the Customs Act would not be applicable. In Pee Gee International vs. The Commissioner of Customs ICD Tughlakabad 2014 (4) TMI 1160 - DELHI HIGH COURT , the Delhi High Court following its judgment in Sony India, also held that the limitation of one year provided for in the Notification dated 14.09.2017 as amended on 01.08.2018, would not be applicable. The Notification dated 14.09.2007 requires fulfilment of certain conditions. The importer has to pay on the sale of the goods appropriate sales tax or value added tax and has to provide copies of documents with the refund claim evidencing payment of said Additional Duty, invoices of sale of the imported goods in respect of which refund of the said Additional Duty is claimed and documents evidencing payment of appropriate sales tax by the importer on the sale of such imported goods. These conditions were examined by the Delhi High Court in Sony India while arriving at a conclusion that the limitation provided in the Notification dated 01.08.2018 that the refund has to be made within a period of one year from the date of payment of Additional Duty has to be read down in as much as the right to claim refund could accrue to an importer only when the subsequent sale is completed and given the vagaries of the market, the importer has limited control over when the sale would be complete. The Division Bench of the Tribunal in JG Impex 2018 (10) TMI 1483 - CESTAT NEW DELHI relied upon 27 of the Customs Act, which was held to be not applicable in case of refund of Additional Duty by the Delhi High Court in Sony India. The decision of the Delhi High Court in Sony India was binding on the Tribunal. The inevitable conclusion, therefore, that follows from the aforesaid discussion is that the order dated 07.05.2021 passed by the Commissioner (Appeals) that has been impugned in the present appeals denying refund claim to the appellant deserve to be set aside and are set aside - Appeal allowed.

Summary

Issues Involved:

1. Whether the period of limitation of one year is applicable to claims filed for refund of Additional Duty of Customs as per Notification No. 102/2007-Cus dated 14.09.2007, amended by Notification No. 93/2008-Cus dated 01.08.2008.

Summary:

1. Period of Limitation for Refund Claims:

The core issue in these appeals was whether the period of limitation of one year stipulated in the Notification dated 14.09.2007, as amended by Notification dated 01.08.2008, applies to refund claims of Additional Duty of Customs. The appellant, Suzuki Motorcycle India Pvt. Ltd., filed refund applications beyond one year from the date of payment of duty. The Assistant Commissioner rejected these claims, citing the one-year limitation. The Commissioner (Appeals) upheld this decision, distinguishing the Delhi High Court's judgment in Sony India Pvt. Ltd. vs. Commissioner of Customs, New Delhi [2014 (304) E.L.T. 660 (Del.)], which pertained to a period before the amendment introducing the one-year limitation.

2. Arguments by the Appellant:

The appellant argued that the time limit prescribed under the Notification dated 14.09.2007, as amended by Notification dated 01.08.2008, had been read down by the Delhi High Court in Sony India. They contended that the Tribunal should follow the jurisdictional Delhi High Court's decision, which held that no limitation period could be imposed for filing a refund claim from the date of payment of Additional Duty, as the right to claim refund accrues only upon subsequent sale.

3. Department's Stand:

The department supported the rejection of the refund claims, arguing that the imports in question were made after the amendment introducing the one-year limitation. They relied on section 27 of the Customs Act, which prescribes a one-year limitation for refund claims, and cited judgments from the Mumbai Tribunal and other cases supporting this view.

4. Tribunal's Analysis and Conclusion:

The Tribunal examined the provisions of section 3(8) of the Customs Tariff Act and section 27 of the Customs Act, alongside the amended Notification. It referred to the Delhi High Court's judgment in Sony India, which held that the limitation period cannot commence from the date of payment of duty as the right to claim refund accrues only upon subsequent sale. The Tribunal noted that the Delhi High Court's decision, binding on the Tribunal, had been followed in subsequent cases and that the Special Leave Petition against it was dismissed by the Supreme Court.

The Tribunal concluded that the one-year limitation period stipulated in the amended Notification cannot be imposed on refund claims of Additional Duty. Consequently, the order dated 07.05.2021 by the Commissioner (Appeals) was set aside, and the appellant was entitled to the refund with consequential relief(s).

Order Pronounced on 25.04.2024