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TMI Blog2020 (12) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... ion became applicable. The findings of the Hon ble high Court clearly show understanding of the department with regard to clause of limitation provided in the Notification. The condition of limitation was not the part of the original notification. It was only with the introduction of Circular No. 6/2008-Cus. and Notification No.93/2008, the department started insisting on the limitation period (of one year) prescribed with effect from 1.8.2008, became applicable. The Hon ble High Court has clearly held that the expression so far as may be used in the sub-section (6) of Section 3 of CTA has to be followed to the extent possible. Merely because Section 27 of the Customs Act provides for a period of limitation for filing refund claim, it cannot be held that even for the purposes of claiming refund in terms of the Notification, the same limitation has to be applied. The Hon ble Delhi High Court has also held that in the maters which deal with substantive rights, such as imposition of penalties and other provisions that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or rules cannot prevail or be made, in such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as SAD), subject to following the conditions mentioned therein. The conditions read as under:- (a) the importer of the said goods shall pay all duties, including the special additional duty (SAD) 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; (d) the importer shall file a claim for refund of the SAD paid on the imported goods, with the jurisdictional customs officer; (e) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be; (f) the importer shall, inter alia, provide copies of the following documents along with the refund claim: (i) document evidencing payment of the special additional duty (SAD); (ii) invoices for sale of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (3) i.e. counterveiling duty in lieu of excise duty or not. Such additional duty as would counter-balance the sales tax (value added tax, local tax, or any other charges‟ for the time being leviable on the like articles, on its sale or purchase or transportation in India. The Central Government may by Notification direct that such imported articles shall in addition be liable to an ‟Additional duty‟ at a rate not exceeding 4.0% of the value of the imported articles, as specified in that notification. 12. Thus, it transpires that SAD levied under Section 3 (5) of the Customs Tariff Act is a duty in the nature of sales tax/VAT. The intent of such duty is to counter-balance the sales tax/VAT, etc. leviable on like goods when sold in India so as to protect the domestic industry. 13. It is further urged that Section 25 (1) of the Customs Act enables the Central Government is satisfied that it is necessary in the public interest, may by notification in the official gazette, exempt generally either absolutely or subject to such condition (to be fulfilled before or after clearance), as may be specified in the notification, goods of any specified description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Act. The procedure for refund is given in Section 26 of the Customs Act, wherein it is provided that any person claiming refund of any duty or interest paid or borne by him, may make an application in such form and manner, as may be prescribed before the expiry of one year‟ from the date of payment of such duty or interest. It is further provided that limitation of one year shall not apply, where any duty or interest has been paid under protest. Further, vide an Explanation, it is provided that the date of payment of duty or interest in relation to a person other than the importer shall be construed as the date of purchase of goods by such person. Further, sub-section (1)(B) to Section 27 provides that for the manner of computation of the period of limitation of one year, wherein if the refund is contingent upon certain future events like Appellate order or judgements or where the duty is paid provisionally, the limitation of one year shall be computed from the date of adjustment of duty after the final assessments or re-assessment, from such date. 16. Ld. Authorised Representative further urges that the limitation of one year introduced vide notification no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled by the importer are sale/resale of the goods on which VAT /ST has been paid. Thus, as rightly held by the Hon ble Delhi High Court, limitation cannot start to run prior to the sale of the imported goods. He further states that SAD is admittedly collected in lieu of service tax/VAT and it is not the customs duty for all practical purpose. Accordingly, the general limitation of one year prescribed under Section 27 of the Customs Act is not applicable. He further points out that ruling of Sony India Ltd. (supra) of Delhi High Court has been consistently followed in the subsequent decisions in CCE, Import Vs. Gulati Sales Corporation - 2018 (360) ELT 277 In PE GEE International Vs. CCE,New Delhi. It is further pointed out that no stay has been granted by the Hon ble Supreme Court in favour of Revenue while admitting the appeal against the order of Delhi High Court in the case of Commissioner Vs. Wilhelm Textiles India Pvt. Ltd. (supra). He further urges that the other Division Benches of this Tribunal has been consistently following the ruling of Sony India Ltd. (supra) in several rulings for examples in CC, New Delhi Vs. Siya Paper Mart Pvt. Ltd. 2018 (364) ELT 809 (Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of refund claims in a case where the importer advances a refund of SAD paid, owing to having incurred sales tax/VAT liability on subsequent sale of goods, it must be introduced by legislation, given the ex propriatory consequences of such a limitation period. (iii) The expression so far as may be in this context, under Section 27 is significant as well as instructive. The levy under Section 3(5) is conditional upon the Central Government‟s opinion that it is necessary to counter-balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article ; the rate of duty where more than one levy exits, would be the highest of such rates and the terms of imposition of SAD would be spelt out in the notification. In this case, the regime existing before the notification of 2008, did not specify any period of limitation and perhaps advisedly so. Some customs authorities apparently started applying Section 27, drawing inspiration from Section 3(8) of the Tariff Act, which led to confusion. In Notification No.102/2007-Customs, dated 14.09.2007, there was no period of limitation; by Circular No.6/2008-Customs, an amending notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consolidate and amend the law relating to customs duty. The duties which are levied have then to be specified and for effective and proper recovery. Even when there is any claim made for drawback, refund and exemption, it is the substantive law, namely, the Customs Act, 1962, which would govern the field. Else no refund can be claimed. (iii) The decision of the Hon ble High Court of Delhi holding that the provisions of the Customs Act or the rules and mechanism for refund are incorporated by reference to Section 3(5) of the CTA only so far as may be applicable and since SAD is levied under Section 3(5), and that is refundable only on subsequent sale, then, no limitation period can possibly be imposed for advancing a refund claim, cannot be agreed with in the light of the analysis of the statutory provisions and the scheme of refund. The Rules and Regulations under the provisions of the Customs Act, 1962, including those relating to drawback, refund and exemption shall so far as may be‟ applied, and this reveals that for the purposes of making an application seeking refund, its consideration, that Customs Act and its provisions are made applicable even to the Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of the right is considered, the submissions made by Mr. Patil/petitioner cannot be agreed with. 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. The submission of Mr. Patil that compliance with this period is calling upon the petitioner to do or perform something which is impossible, cannot be agreed with. The exemption notification does not impose any new condition as has been read into it. It grants the exemption from payment of duty conditionally. The exemption can be availed or provided the goods which are imported are subject to payment of duties which include all the duties that are referred to in both the enactment and the notification. If the import is for subsequent sale, then, that invoice must carry a stipulation that no credit for the additional duty of customs shall be admissible. The importer thereafter can file a claim for refund of the special additional duty of customs paid on the imported goods, before the expiry of one year from the date of payment of additional duty of customs . (iv) With reference to the submission of Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration from Section 3(8) of Tariff Act, which lead to confusion. In Notification No. 102/2007-Cus., dated 14.09.2007, there was no prescribed period of limitation; by Circular No. 6/2008-Cus., period of one year was insisted and thereafter an amending notification providing for one year period from the date of payment of the additional duty of customs was issued, through Notification No. 93/2008-Cus., dated 1.8.2008, amending Para 2(c) of the 2007 Notification. The net effect of these was that a one year period was insisted upon for refund applications. (3) Section 27(1) of the Customs Act prescribes time limit of expiry of one year‟, from the date of payment of such duty or interest... . Section 27(1B) lists out three contingencies when the one year limit applies with modified effect. That provision has the effect of shifting the date from which the refund claim is to be reckoned. All that can be inferred from the term so far as may be , would be that specific provisions relating to the mechanism applicable for refund, in the Customs Act, applied; not the period of limitation. The Customs authorities had never understood Section 27(1) as to mean that a one year period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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