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2018 (6) TMI 1374 - AT - CustomsRefund of 4% CVD (SAD) in cash - rejection for the reasons that the DEPB scrips are credited after 30/09/2013 as per Board circular No.18/2013-Cus. dt. 29/04/2013 - whether 4% of the SAD paid through DEPB scrips can be refunded through cash or not? - Held that - This issue has been considered by the Hon ble High Court of Delhi in the case of Allen Diesels India Pvt. Ltd. 2016 (2) TMI 247 - DELHI HIGH COURT and the Hon ble High Court after considering all the submissions of both the parties has come to the conclusion that the circular issued by CBEC cannot impose any additional restriction for grant of refund under a notification and such circulars are ultra vires. Rejection also on the ground of time bar - Held that - The rejection of refund claims on time bar in the present case is not sustainable because only the defect memo was issued and the refund claims were not rejected - also the Notification No 102/2007 does not prescribe any time limit for claiming the refund. The original authority will verify and examine the documents and thereafter will decide the refund claims of the appellant - appeal allowed by way of remand.
Issues Involved:
1. Refund of 4% CVD (SAD) paid through DEPB scrips. 2. Validity of CBEC circulars imposing additional restrictions. 3. Time-bar for refund claims and the impact of defect memos. Detailed Analysis: 1. Refund of 4% CVD (SAD) Paid Through DEPB Scrips: The core issue in these appeals is whether the 4% Special Additional Duty (SAD) paid through DEPB scrips can be refunded in cash. The appellant argued that the impugned orders are not sustainable as they contradict binding judicial precedents and impose additional restrictions not present in the original notification. The appellant cited the Delhi High Court's judgment in Allen Diesels India Pvt. Ltd., which held that CBEC circulars cannot impose additional restrictions for refund under a notification. The High Court declared that Circular Nos. 6/2008, 10/2012, and 18/2013, which sought to deny refunds of SAD paid using DEPB scrips, are invalid. 2. Validity of CBEC Circulars Imposing Additional Restrictions: The judgment extensively discusses the legal position regarding the validity of CBEC circulars. It was noted that Section 151A of the Customs Act does not allow for amendments to exemption notifications through circulars. The court cited several precedents, including Sandur Micro Circuits Ltd. and Modi Rubber Ltd., establishing that circulars cannot override or amend statutory notifications. The court concluded that the circulars in question were ultra vires and could not legally sustain additional restrictions for refunds under Notification No. 102/2007-Customs. 3. Time-Bar for Refund Claims and the Impact of Defect Memos: The appellant contended that some refund claims were wrongly held to be time-barred due to defect memos. The court agreed, citing the IGP Engineers case, which held that the issuance of a defect memo does not reject the refund claim, and the limitation period starts from the original filing date. The court found that Notification No. 102/2007 does not prescribe a time limit for claiming refunds. Therefore, the rejection of refund claims on the basis of being time-barred was deemed unsustainable. Conclusion: The tribunal set aside the impugned orders, allowing the appeals with consequential relief. It directed the original authority to verify and examine the documents and decide the refund claims in accordance with the findings, particularly considering the invalidity of the CBEC circulars as per the Delhi High Court's judgment in Allen Diesels India Pvt. Ltd. Order Pronouncement: The order was pronounced in Open Court on 30/05/2018.
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