2017 (11) TMI 558 - HC - Customs

Doctrine of merger - Refund of SAD - deposit of SAD in lieu of sales tax at the time of import u/s 3(5) of the CTA, 1975 - denial of refund on the ground that the refund application was filed after expiry of period of one year from the date of payment of SAD - Held that - it is well settled that doctrine of merger is not applicable when a Special Leave Petition against a decision of a High Court is summarily dismissed without recording reasons - what binds this Court is the law laid down by a Coordinate Bench of this Court in the case of CMS Info Systems Limited 2017 (1) TMI 786 - BOMBAY HIGH COURT , where it was held that The power to consider that refund claim and grant it, if permissible, is traceable to Section 27 of the Customs Act, 1962. Therefore, it was impossible to ignore the statutory bar and contained in sub-section (1) of Section 27 at any time - appeal allowed - decided in favor of Revenue.

Summary

Issues involved:
1. Interpretation of the deposit of Special Additional Duty (SAD) in lieu of sales tax at the time of import under Section 3(5) of the Customs Tariff Act, 1975.
2. Whether the decision of Delhi High Court in Sony India Pvt. Ltd. case is a binding precedent.
3. Whether the judgments of the Appellate Tribunal are perverse due to ignoring the demands from the year 2010 onwards.

Analysis:
1. The appeal concerned the deposit of Special Additional Duty (SAD) in lieu of sales tax at the time of import under Section 3(5) of the Customs Tariff Act, 1975. The dispute arose when the respondent-assessee filed a refund claim for SAD, which was rejected due to a time limitation specified in a notification. The Appellate Tribunal allowed the refund claim based on a Delhi High Court decision. However, the appellant argued that a Division Bench of the Bombay High Court held that the limitation period prescribed in the notification would apply, contrary to the Delhi High Court decision.

2. The main contention was whether the Delhi High Court decision in Sony India Pvt. Ltd. case is a binding precedent. The appellant argued that the Division Bench of the Bombay High Court in CMS Info Systems Limited case held that the limitation as prescribed in the notification would operate, unlike the Delhi High Court decision. The respondent, relying on the Apex Court's dismissal of a Special Leave Petition, claimed finality of the Delhi High Court decision. The High Court held that the law laid down by a Coordinate Bench of the same Court in CMS Info Systems Limited case binds them, leading to quashing the impugned judgment.

3. The issue of perversity in the judgments of the Appellate Tribunal was raised concerning the demands from the year 2010 onwards. The appellant contended that the Appellate Tribunal failed to consider the demands' timelines, leading to the erroneous allowance of the refund claim. However, the High Court's decision to quash the judgment based on the binding precedent rendered this issue moot. Consequently, the High Court dismissed the appeal, set aside the impugned judgment, and disposed of related motions, with no order as to costs.