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2013 (9) TMI 705 - HC - CustomsRefund of 4% SAD - Circular No. 23/2010 - whether ulta virus Refund of Provisional Duty Paid Notification No. 102/2007 - Period of Limitation - Whether the Central Government while imposing conditions for grant of exemption u/s 25(1) of the Act could lay down conditions in derogation to the specific statutory provisions and stipulations contained in Section 27 of the Act - The problem had arisen largely due to failure of the respondents to pass final adjudication orders which were belatedly made - There was no explanation for this delay and the cause - Held that - It will be proper to harmoniously construe and interpret notification dated 1st August, 2008 and Section 27 read with Circular dated 29th July, 2010 by holding that an Assessee can make a claim for refund under notification No. 93 of 2008 dated 1st August, 2008 either by filing an application for refund within the limitation period specified under Section 27 of the Customs Act, 1962 or within the extended limitation period of one year from the actual date of payment even, if the said payment made was pursuant to provisional assessment - The longer of the two periods i.e. the period specified under Section 27 or the notification dated 1st August, 2008 read with Circular No. 23/2010 Custom dated 29th July, 2010 would be applicable - The petitioner had filed the claims within the period stipulated by section 27 of the Act, in view of the construction given by us, the same could not have been rejected on the ground of limitation. Circular No. 23 of 2010 was issued on 29.07.2010 stipulating a limitation of one year from the date of payment of the duty at the time of clearance of the imported goods - If the period in the circular was to be followed then some of the refund claims of the petitioner would become time barred and in others hardly any time would be left for the petitioner to make a claim - Where the imported goods were released on payment of CVD on regular assessment, the application seeking refund can be made within one year of the payment of the CVD in terms of the notification dated 1st August, 2008 read with Circular No. 23/2010 Custom dated 29th July, 2010. Where the goods were released on provisional assessment followed by the final assessment, the application seeking refund can be made within the period of one year or six months, as the case may be, of the final assessment as stipulated by Explanation II to section 27 of the Act or within the enlarged period of one year from the date of provisional release as stipulated by the notification dated 1st August, 2008 read with Circular No. 23/2010 Custom dated 29th July, 2010. The Circular No. 23/2010-Custom in so far as it stipulates that the provisions of section 27 of the Act do not apply to the Notification cannot be sustained to the extent indicated. The Circular No. 23/2010-Custom to the extent it holds that section 27 of the Act had no application was held ultra-vires the statute and quashed - The orders dated 21.3.2011 and 27.4.2011 passed by respondent No.2 relying on Circular No. 23/2010-Custom dated 29.07.2010 were hereby set aside and the matter was remanded to respondent No.2 to assess the claim of the petitioner for refund on imports and to process the same in accordance with the provisions of Section 27 of the Act.
Issues Involved:
1. Validity of Circular No. 23/2010-Customs dated 29.7.2010. 2. Validity of Notification No. 93/2008-Customs dated 1.8.2008. 3. Application of Section 27 of the Customs Act, 1962 to refund claims under the impugned notification and circular. 4. Whether the Central Government can impose conditions in derogation of statutory provisions of Section 27 of the Act. 5. Determination of the limitation period for filing refund claims in cases of provisional assessment. Issue-wise Detailed Analysis: 1. Validity of Circular No. 23/2010-Customs dated 29.7.2010: The petitioner challenged Circular No. 23/2010-Customs, which stipulates that the limitation period for refund claims should be calculated from the date of payment of provisional duty, not from the date of final assessment. The court found this stipulation incorrect, holding that Section 27 of the Customs Act applies because of the statute itself and does not require a notification for its application. The circular was deemed ultra vires to the extent it stated that Section 27 does not apply to the notification. 2. Validity of Notification No. 93/2008-Customs dated 1.8.2008: Notification No. 93/2008 amended the earlier notification to include a one-year time limit for filing refund claims from the date of payment of additional duty. The court held that while the Central Government can issue notifications under Section 25 of the Act to grant exemptions, it cannot impose conditions more stringent than those prescribed by the statute. The notification was harmonized with Section 27 to allow claims within one year from the date of final assessment or the date of payment, whichever is longer. 3. Application of Section 27 of the Customs Act, 1962 to refund claims under the impugned notification and circular: Section 27 of the Customs Act provides a general provision for refund claims, stipulating a limitation period of one year or six months from the date of final assessment. The court held that this section applies to all refund claims, including those under the notification. The impugned circular and notification could not override the statutory provisions of Section 27. 4. Whether the Central Government can impose conditions in derogation of statutory provisions of Section 27 of the Act: The court held that the Central Government cannot impose conditions through notifications or circulars that are more stringent than the statutory provisions. Notifications under Section 25 can only grant exemptions or be more liberal, but cannot curtail rights or impose harsher conditions. Thus, the conditions in the impugned circular and notification that reduced the limitation period for refund claims were invalid. 5. Determination of the limitation period for filing refund claims in cases of provisional assessment: The court clarified that for provisional assessments, the limitation period for refund claims should be computed from the date of final assessment, as per Explanation II to Section 27. The impugned circular's stipulation to compute the period from the date of provisional payment was incorrect. The court harmonized the provisions to allow claims within one year from the date of final assessment or the date of payment, whichever is longer. Conclusion: The court quashed Circular No. 23/2010-Customs to the extent it held that Section 27 does not apply. The impugned orders were set aside, and the matter was remanded for reassessment of the petitioner's refund claims in accordance with Section 27. The writ petition was disposed of with no order as to costs.
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