2022 (11) TMI 110 - AT - Customs

Refund of SAD - SAD paid on importation of Timber Round Logs through 39 Bills of Entry during December 2018 to March 2011 - denial of refund on the ground of time limitation - HELD THAT - The refund claim was admittedly not filed within the period of one year as prescribed in paragraph 2 of clause C of Notification No. 102/2007-Cus dated 14.09.2007 and the same stands filed within a period of one year from the date of order of Hon ble Supreme court. Further it is on record that appellant regularly filed the refund and department had not granted the refund after the period of 2009 on the ground that one of the condition of the Notification that refund of SAD would be entitled only if the imported goods were sold as such, has not been complied with. Pursuant to the action of department for not granting the refund, the Appellant was issued show cause notice for denial of refund claim on the ground that since the identity of goods imported by the Appellant was changed on account of sawing the timber, appellant was not entitled for refund. Further, Board vide circular No. 15/2010-CUS dated 29.06.2010 also clarified that refund of SAD would not be eligible to the importer in the case there is distinct classification for the imported and the final products that are same in market on which VAT was paid. Further, from the provisions of Section 27(1B) (C), it is clear that refund claim can be filed in consequence of any judgment decree, or direction of the appellate authority within one year - In this case, it is on record that the issue related to refund of SAD was under litigation and attained finality after the decision of Hon ble Supreme Court. Therefore, as per the provisions of Section 27 of the Customs Act, 1962, the limitation for filing the refund claim shall start from date of decision of Hon ble Supreme Court. In these circumstances, it is held that the refund claim filed by the appellant is within time. From the Board s circular No.15/2010-CUS dated 29.06.2010, it is clear that the appellant was not allowed to file refund claim by the government till the issue on merit was settled by the Hon ble Apex court in the appellant s own case COMMISSIONER OF CUSTOMS VERSUS VARIETY LUMBERS PVT. LTD. 2018 (6) TMI 1499 - SUPREME COURT - In the peculiar fact of this case the period upto the decision of the Hon ble Supreme Court shall be reduced for the purpose of the relevant date as prescribed in Section 27 for computing the period of limitation of one year. Accordingly, in this case the relevant date shall be the date of the Apex court decision i.e. 24.04.2018. The appellant admittedly filed the refund claim within one year from the date of the Hon ble Supreme Court judgment. Hence refund claim was filed well within the stipulated time period of one year from the relevant date in terms of Section 27 of the Customs Act, 1962. In the facts of the present case, the refund claim of the appellant is not hit by limitation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of refund of Special Additional Duty (SAD) based on limitation.

Analysis:
1. The appellant imported Timber Round Logs and paid 4% SAD. Later, a refund claim was filed based on an exemption under Notification No. 102/2007-Cus, which required filing within one year from SAD payment. The claim was rejected due to being beyond the limitation period.
2. The appellant argued that the claim was timely as per the Hon'ble Supreme Court's decision, Circular No. 15/2010-Cus, and the purpose of avoiding double taxation of SAD and VAT.
3. The appellant contended that the SAD was paid on goods not consumed, and VAT was paid on subsequent sale, justifying the refund. The claim was filed within one year of the Supreme Court's decision, as per Section 27(1B)(b) of the Customs Act.
4. The appellant highlighted that a Board circular prevented refund claims until the issue was resolved by the Supreme Court, adjusting the relevant date for limitation calculation to the Supreme Court's decision date.
5. The Tribunal found no dispute on facts, noted the appellant's regular refund filings, and the department's non-refund based on a condition not met. The refund claim was filed within one year of the Supreme Court's decision, aligning with Section 27 provisions.
6. The Tribunal considered the impact of the Board circular on the limitation period, concluding that the refund claim was not time-barred. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.