2019 (4) TMI 142 - AT - Customs

Refund of SAD - N/N. 102/2007 - time limitation - section 27 of Customs Act, 1962 - discharge of VAT liability by appellant - Held that - Condition no. 2(d) of notification no. 102/2007-Cus dated 14th September 2007 mandates discharge of VAT liability as a prerequisite for claiming the exemption ex post facto. It is not disputed that some of the sales had occurred more than a year after the goods were cleared. The exemption is effected through refund upon evidencing of discharge of VAT liability and section 27 of Customs Act, 1962 prescribes time-limit of one year from the relevant date beyond which it cannot be claimed. The impugned order has rendered a finding on the ineligibility, the sanction of refund by the original authority was not proper - appeal dismissed.

Summary

Issues:
Appeal against setting aside of refund of special additional duty on imports due to VAT liability discharge exceeding one year.

Analysis:
The appeal was filed by M/s Hariyana International Pvt Ltd against the order-in-appeal of the Commissioner of Customs (Appeals), Mumbai, which set aside the sanction of refund of special additional duty amounting to &8377; 19,78,153 and &8377; 9,54,145 paid on imports against specific bill of entry numbers. The first appellate authority allowed the appeal of the Commissioner of Customs (Import), New Custom House, Mumbai, based on the fact that the sales of goods and the discharge of VAT liability occurred more than a year after the payment of customs duties. This rendered the refund claim ineligible due to the limitation period under section 27 of the Customs Act, 1962.

The notification no. 102/2007-Cus dated 14th September 2007 specified condition 2(d), which required the discharge of VAT liability as a precondition for claiming exemption ex post facto. It was established that some sales took place over a year after the goods were cleared. The exemption was granted through a refund upon proving the discharge of VAT liability, and section 27 of the Customs Act, 1962 imposed a one-year time limit from the relevant date for claiming such refunds. The impugned order correctly found the appellant ineligible for the refund due to the lapse of the statutory time limit.

In the absence of representation from the appellant, the tribunal considered the arguments presented by the Learned Authorised Representative. The tribunal concluded that the original authority's sanction of the refund was improper, given the findings on the ineligibility of the appellant. Consequently, the appeal was dismissed, and no merit was found in the appellant's case.

Therefore, the appellate tribunal upheld the decision of the first appellate authority and dismissed the appeal of M/s Hariyana International Pvt Ltd, affirming the ineligibility for the refund of special additional duty on imports due to the VAT liability discharge occurring beyond the statutory one-year limit set by the Customs Act, 1962.