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TMI Blog2019 (9) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions therein must apply in full force and therefore if the application is filed after one year, the appellants are not entitled to refund. Therefore, there is no force in the appeals and therefore they may be rejected. Ld. D.R relies on the judgment of Hon ble High Court of Bombay with respect to SAD refunds in W.P. No.388 of 2016 in the case of CMS INFO Systems Ltd. Vs Union of India - 2017 (349) ELT 236 (Bom.) in which the Hon ble High Court of Bombay has held that the importer has no vested right of refund and it flows only from the exemption notification and therefore all conditions of the exemption notification apply. Hence a refund claim filed after the period of one year is not admissible. 5. Both sides fairly submit that there is no decision of the jurisdictional High Court of this Bench. Both the aforesaid judgments have been appealed against before the Supreme Court. Revenue challenged the judgment of the High Court of Delhi in the case of Sony India Pvt. Ltd. (supra) and the Hon ble Supreme Court has dismissed the appeal on grounds of delay leaving the question of law open. The importer appealed against the judgment of the Hon ble High Court of Bombay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the period 14.09.2007 upto 01.08.2008 no time limit within which an application for refund can be filed was prescribed. An amendment was made vide Notification 93/2008 dt. 1.8.2008 introducing a time limit of one year from the payment of Special Additional Duty of Customs to file refund claims. The relevant exemption notifications before and after this period are as below : {Notification No. 102/2007-Cus., dated 14-9-2007} Exemption from special CVD to all goods imported for subsequent sale when VAT/Sales Tax paid by importer . - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India for subsequent sale, from the whole of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act (hereinafter referred to as the said additional duty). 2. The exemption contained in this notification shall be given effect if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication shall be given effect if the following conditions are fulfilled : (a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods; (b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible; (c) the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer before the expiry of one year from the date of payment of the said additional duty of customs; (d) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be; (e) the importer shall, inter alia, provide copies of the following documents along with the refund claim : (i) document evidencing payment of the said additional duty; (ii) invoices of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) considered the above judgment of the Hon ble High Court of Delhi and differed from it. The Hon ble High Court of Bombay observed that in terms of Section 3 (5) of the Customs Tariff Act, the provisions of Customs Act and the rules and mechanisms for refund apply to any claim of refund of SAD. Therefore, Section 27 of the Customs Act, 1962 including the time limit of one year applies. Further, the amended notification has also introduced a limitation for seeking refund. Particularly, the Hon ble Bombay High Court also held that this is an exemption granted and it is conditional. The exemption being conditional, it is not permissible to pick and choose the convenient conditions of the exemption notification and leave out those which are onerous and excessive. The Hon ble High Court further held that but for the exemption notification, there is no right of refund vested with the importer. Para-33 of this judgment is reproduced below : 33 . It is submitted that the Hon ble High Court of Delhi has clearly opined and held that the provisions of the Customs Act on the rules and mechanism for refund are incorporated by reference in Section 3(5) of the CTA only so far a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal as well for the simple reason that sub-section (1) of Section 27 of the Customs Act, 1962, which enables claiming of refund by making an application itself speaks of one year outer limit. That is never challenged, including in the present proceedings. That the period of one year commences from the payment of the duty. If that is how Section 27 is worded and every duty is included in its ambit and scope, then, an application seeking refund of the same has to abide by it, including the bar of limitation contained therein. That is how consistent with that provision even the special exemption notification carries the same stipulation or condition. We do not see how insistence on complying with it can be said to be imposing an unreasonable, unfair and unjust restriction. Once the nature of the right is considered, then, all the more we are unable to agree with Mr. Patil. There is no vested, much less absolute right in the petitioners to seek refund. Even a refund must be within the framework of the statute and admissible on the terms thereof. We are not inclined to agree with him that compliance with this period is calling upon the petitioner to do or perform something which is imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses dealt with by the Hon ble High Court of Bombay in CMS INFO Systems Ltd. (supra) as all imports were done after the introduction of the limitation period. He further asserts that even if the limitation of one year under the amended notification is read down as held by the Hon ble High Court of Delhi then in terms of Section 3 (5) of the Customs Tariff Act, 1975 all provisions of Customs Act will apply including provisions of refund under Section 27. Therefore, no refund can be sanctioned beyond the period of one year. Lastly, he argued that the entire question is one of interpretation and application of the exemption notification with respect to the imported goods. In this particular exemption notification, the exemption is made available by way of refund after ensuring that the required conditions are met. Hence it is one of interpreting the exemption notification. The Hon ble High Court of Delhi has taken a more liberal, purposive interpretation of the exemption notification and held that its benefit cannot be denied simply because the importer is not able to complete his subsequent sale and avail the exemption notification within the time period prescribed. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivered on 16.04.2014 while the judgment of Hon ble High Court of Mumbai was delivered on 19.12.2016. The judgment of the Constitutional Bench of the Hon ble Apex Court in the case of Dilip Kumar Company (supra) finally laying down the law was passed on 30.07.2018. Therefore, this judgment prevails over earlier decisions of the Hon ble High Court of Delhi. 16. We have considered the arguments on both sides and perused the records. 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. (supra) held that this section should not apply to refund of SAD because the refund is as per the Notification. The Hon ble High Court of Delhi was dealing with a situation where there was no limitation in the exemption notifications for filing the refund claim at the time of import but which was introduced by the time refund claim was filed. The Hon ble High Court of Bombay, on the other hand, was dealing with a case such as the present one, where the imports have taken place after the amending notification. The Hon ble High Court of Bombay also held that the limitation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 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. However, the question of strict versus liberal interpretations of the exemption notifications has now finally been settled by the judgment of the Constitutional Bench of the Hon ble Apex Court on 30th July 2018 in the case of Dilip Kumar Company (supra), any exemption notification must be strictly interpreted and any benefit of doubt must go in favour of the Revenue and against the assesse. Contrary decisions such as those in the case of Sun Export Corporation VS Collector [1997 (93) ELT 641 (SC)] have been overruled by the aforesaid Five-Judge Constitutional Bench. 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) is consistent and appropriate, syncs well with the ratio of Dilip Kumar s case (supra), which is required to be followed. 18. Consequently, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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