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2025 (3) TMI 1260 - HC - CustomsMaintainability of appeal on the ground of low tax effect - Refund of the deposited SAD - rejection on the ground that the same were filed beyond limitation and the original documents had not been furnished - HELD THAT - A perusal of the table in paragraph 3 of this order would show that firstly the appeals would not be liable to be entertained on the ground of Low Tax Effect. In addition there have been consistent decisions by the Coordinate Benches of this Court in Commissioner of Customs v. Nanak Electronics 2023 (1) TMI 1315 - DELHI HIGH COURT and Commissioner of Customs v. Bhimeshwari Overseas 2023 (1) TMI 1316 - DELHI HIGH COURT . In the opinion of this Court the most important feature would be that there have been consistent decisions of Coordinate Benches and the ld. Single Judges that in such cases SAD would be liable to be refunded. The Bombay High Court decision in CMS Info Systems Ltd. 2017 (1) TMI 786 - BOMBAY HIGH COURT has not been followed by this Court. In view of the fact that the issues raised in these appeals are fully covered by the above decisions as also on the issue of Low Tax Effect this Court is not inclined to entertain the present appeals. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment revolve around the refund of Special Additional Duty (SAD) paid by the Respondent, M/s Suzuki Motors Pvt. Ltd., and whether such refunds should be granted despite being filed beyond the prescribed limitation period. The key questions include:
ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework revolves around Notification No. 102/2007-Cus., which provides an exemption from SAD for goods imported for subsequent sale when VAT/Sales Tax is paid by the importer. The notification was amended by Notification No. 93/2008-Cus., introducing a one-year limitation for filing refund claims. Section 3 of the Customs Tariff Act, 1975, and Section 27 of the Customs Act, 1962, are also pertinent, as they govern the levy of additional duties and refunds. Precedents include the Delhi High Court's decision in Sony India Pvt. Ltd., which allowed refunds despite the limitation period, and the Bombay High Court's decision in CMS Info Systems Ltd., which took a contrary view. Court's Interpretation and Reasoning The Court acknowledged the conflicting views between the Delhi and Bombay High Courts regarding the refund of SAD. It emphasized the consistent decisions by the Delhi High Court's Coordinate Benches favoring the refund of SAD, even in cases where claims were filed beyond the limitation period. The Court noted that these decisions have not been overturned by the Supreme Court, except for the Sony India case, which remains pending. Key Evidence and Findings The evidence considered includes the timing of the Respondent's imports and payments, which occurred under the original notification without a time limit for refunds. The Court also reviewed the decisions of the Delhi High Court in similar cases, which consistently allowed refunds. Application of Law to Facts The Court applied the principles established in previous Delhi High Court decisions, which favored granting refunds of SAD despite the limitation period introduced by the amended notification. It found that the Respondent's situation was analogous to those cases and thus warranted a similar outcome. Treatment of Competing Arguments The Court considered the arguments presented by the Customs Department, which relied on the limitation period and the Bombay High Court's decision. However, it found the Delhi High Court's consistent rulings and the issue of Low Tax Effect more persuasive, leading to the dismissal of the appeals. Conclusions The Court concluded that the Respondent is entitled to the refund of SAD, following the precedent set by the Delhi High Court in similar cases. The appeals were dismissed based on the consistent application of the law by the Coordinate Benches and the issue of Low Tax Effect. SIGNIFICANT HOLDINGS The Court upheld the principle that SAD refunds should be granted even if claims are filed beyond the limitation period, as long as the original notification did not stipulate such a period. It emphasized the public interest served by the exemption and refund of SAD. Core Principles Established
Final Determinations on Each Issue The Court determined that the Respondent's refund claims are valid and should be processed, dismissing the appeals filed by the Customs Department. It reinforced the view that the limitation period introduced by the amended notification should not bar legitimate refund claims under the original notification.
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