2019 (12) TMI 654 - AT - Customs

Refund of SAD - N/N. 102/2007 - time limitation/relevant date for filing of refund claim - in view of Section 27 of the Customs Act, appellant was entitled for refund within one year of the date of final assessment - in this case provisional assessment was finalised on 27-12-2017 - HELD THAT - Perused the copy of the confirmation of assessment vide letter of the Asst. Commissioner of Customs in Annexure (6) of the additional submissions. Further going by the OIO and OIA, it can be said that there is nothing available in these two orders or in the case records to substantiate that such ground was taken before the authorities below while claiming refund to bring the claim into the purview of Section 27 of the Customs Act. The issue has been dealt in the case of M/S BITUMEN CORPORATION I LTD. VERSUS COMMISSIONER OF CUSTOMS, NHAVASHEVA-II 2019 (3) TMI 125 - CESTAT MUMBAI where it was held that The appellant refund claim is to be reassessed on the basis of date of payment of CST/VAT etc. that was earlier deposited by way of SAD that has been exempted vide Notification No. 102/2007-Cus. and 93/2008-Cus. and allowed if claim is made within one year of payment of CST/VAT. The appellants are entitled to refund of SAD on production of proof of VAT/CST payment within a year of their filing application before refund sanctioning authority who is directed to complete the refund process within a period of two months from the date of receipt of this order with due regard to Section 11/BB of the Central Excise Act dealing with interest on delayed refunds - appeal allowed.

Issues Involved:

1. Rejection of refund claim of Special Additional Duty (SAD) of customs.
2. Interpretation of the time limit for filing refund claims under the relevant notifications.
3. Applicability of judicial precedents from different High Courts.

Issue-wise Detailed Analysis:

1. Rejection of refund claim of Special Additional Duty (SAD) of customs:

The appellants challenged the rejection of their refund claims for SAD by the refund sanctioning authority, which was confirmed by the Commissioner of Customs (Appeals). The appellant M/s. Ideal Tridon Clamp sought a refund for 8 Bills of Entry amounting to ?5,20,410/-, while M/s. Shree Namolar International (P) Ltd. sought a refund for 4 Bills of Entry amounting to ?10,14,283/-. The rejection was based on the interpretation of the date of payment for SAD and the time limit for filing the refund claim.

2. Interpretation of the time limit for filing refund claims under the relevant notifications:

The appellants argued that the time limit for filing the refund claim should be computed from the date of final assessment, not the date of payment of SAD. They cited the Delhi High Court's decision in Pioneer India Electronics (P) Ltd. v. Union of India and Sony India Pvt. Ltd., which supported their interpretation. The respondent Department, however, supported the view that the time limit should be computed from the date of payment of SAD, as upheld by the Bombay High Court in CMS Info System Ltd.

The Tribunal examined the genesis of SAD, which was introduced to create a level playing field for domestic goods vis-a-vis imports. The SAD was meant to counterbalance CST/VAT and was refundable upon payment of these taxes. The Tribunal noted that the purpose of SAD was to ensure price equilibrium and that it was collected as a security to be refunded upon the sale of imported goods and payment of CST/VAT.

3. Applicability of judicial precedents from different High Courts:

The Tribunal acknowledged conflicting views from the Delhi High Court and the Bombay High Court regarding the time limit for filing refund claims. The Delhi High Court had rejected the time frame inclusion notification, while the Bombay High Court held that all conditions, including the time limit, must be complied with.

The Tribunal, considering its all-India jurisdiction, referred to the Larger Bench decision in Atma Steel Pvt. Ltd. & Others Vs. Collector of Central Excise, Chandigarh, which allowed the Tribunal to consider judgments holding conflicting views and apply the most appropriate one to the facts of the case. The Tribunal concluded that the time limit for filing the refund claim should be computed from the date of payment of CST/VAT, as the purpose of SAD was to counterbalance these taxes.

Conclusion:

The Tribunal allowed the appeals, setting aside the order passed by the Commissioner of Customs. The appellants were entitled to a refund of SAD upon production of proof of VAT/CST payment within a year of their filing application. The refund sanctioning authority was directed to complete the refund process within two months from the date of receipt of the order, with due regard to Section 11/BB of the Central Excise Act dealing with interest on delayed refunds.

Order Pronounced:

Both appeals were allowed, and the order passed by the Commissioner Customs was set aside. The appellants were entitled to a refund of SAD on production of proof of VAT/CST payment within a year of their filing application. The refund process was to be completed within two months from the date of receipt of this order.

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