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2019 (9) TMI 1266 - AT - CustomsRefund of SAD - N/N. 102/2007-Cus. dt. 14.09.2007 read with Notification No.93/2008 dt. 01.08.2008 - rejection of refund on the ground that the appellants have filed all these refund claims after the period of one year - Difference of opinion among various High Courts - HELD THAT - The provisions for refund of Customs duty available under the Customs Act is under Section 27. The Hon ble High Court of Delhi in the case of SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS 2014 (4) TMI 870 - DELHI HIGH COURT has taken a liberal view on interpreting the exemption notification and held that since the purpose of availing the SAD is to provide level playing field between the imported goods and the domestic goods, when the imported goods are resold on payment of VAT to the State Government, the exemption notification provides for refund of SAD. It may or may not be always possible for the importer to resell the goods and file the refund claim within time depending on his market conditions. Taking a liberal view, the Hon ble High Court held that refund is available without the limitation of one year indicated in the exemption Notification 102/97 after amendment. On the other hand, the Hon ble Bombay High Court in the case of M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA OTHERS 2017 (1) TMI 786 - BOMBAY HIGH COURT has constructed the exemption notification strictly and held that all conditions including the time limit within which the refund claim has to be filed must be fulfilled. We also find that there is no order of the jurisdictional High Court of Madras. Judicial discipline requires us to follow the judgment of the Apex Court and interpret the exemption notification strictly as it has been drafted including the time limit within which refund applications have to be filed. We find that the judgment of the Hon ble High Court of Bombay in the case of CMS INFO System (supra)M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA OTHERS 2017 (1) TMI 786 - BOMBAY HIGH COURT is consistent and appropriate, syncs well with the ratio of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. 2018 (7) TMI 1826 - SUPREME COURT , which is required to be followed. The refund applications of the importer beyond the time limit have been correctly rejected by the lower authorities - Appeal dismissed.
Issues Involved:
1. Entitlement to refund of Special Additional Duty (SAD) paid on imported goods. 2. Applicability of time limitation for filing refund claims as per Notification No. 102/2007-Cus. and its amendment by Notification No. 93/2008-Cus. 3. Interpretation of exemption notifications, whether strict or liberal. 4. Precedence of judicial decisions in the context of conflicting judgments from different High Courts. Issue-wise Detailed Analysis: 1. Entitlement to Refund of Special Additional Duty (SAD) Paid on Imported Goods: The appellants imported goods and paid SAD at 4%, claiming entitlement to a refund under Notification No. 102/2007-Cus. if the goods were sold on payment of VAT. The refund claims were filed after one year, leading to their rejection by the original and first appellate authorities. The appellants argued that the benefit of refund should not be denied due to the time limit, relying on the Delhi High Court's judgment in Sony India Pvt. Ltd. vs. CC, which held that the one-year limitation should not apply to SAD refunds. 2. Applicability of Time Limitation for Filing Refund Claims: Per Notification No. 93/2008-Cus., a time limit of one year from the payment of SAD was introduced for filing refund claims. The appellants filed claims beyond this period. The respondent argued that all conditions of the exemption notification, including the time limit, must be fulfilled. The Bombay High Court in CMS INFO Systems Ltd. vs. Union of India held that the importer has no vested right to a refund and all conditions, including the time limit, must be adhered to. 3. Interpretation of Exemption Notifications: The Delhi High Court in Sony India Pvt. Ltd. took a liberal interpretation, holding that the limitation period should not apply retrospectively and that Section 27 of the Customs Act does not apply to SAD refunds. Conversely, the Bombay High Court in CMS INFO Systems Ltd. took a strict interpretation, asserting that all conditions, including the time limit, must be fulfilled, and Section 27's one-year limit applies to SAD refunds. 4. Precedence of Judicial Decisions: The conflicting judgments from the Delhi and Bombay High Courts were noted, with both judgments appealed to the Supreme Court. The Supreme Court dismissed the appeal against the Delhi High Court's judgment on grounds of delay, leaving the question of law open. The appeal against the Bombay High Court's judgment was admitted but not stayed. The matter of interpreting exemption notifications was settled by the Supreme Court's Constitutional Bench in Commissioner of Customs (Import) Mumbai vs. Dilip Kumar & Company, which held that exemption notifications should be interpreted strictly, favoring the Revenue in case of ambiguity. Conclusion: The Tribunal found that the Bombay High Court's judgment in CMS INFO Systems Ltd. aligns with the Supreme Court's ruling in Dilip Kumar & Company, which mandates strict interpretation of exemption notifications. Consequently, the appellants' refund claims filed beyond the one-year limit were correctly rejected by the lower authorities. The appeals were dismissed, and the impugned orders upheld, reinforcing the requirement for strict compliance with all conditions of exemption notifications, including time limits for refund claims.
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