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TMI Blog2021 (12) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 matters 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 case. Appeal allowed - decided in favor of appellant. - Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art, as the right to claim refund arises only on subsequent sale and deposit of Sales Tax /VAT. Reliance was placed on the following rulings:- i) Sony India Pvt. Ltd., -2014 (304) ELT 660 (Del.) ii) Purab Textile Pvt. Ltd., -2015 (330) ELT 414 (Tri. Mum.) iii) International Refrigeration Corpn.-2016 (332) ELT (Tri. Del.) As regards the observation that for two Bills of Entry, duplicate copy has been filed instead of original ones. The appellant has placed reliance in the case of Commissioner of Customs and C. Ex., Noida vs. Progressive Alloys (I) Pvt. Ltd., reported at 2017 (358) ELT 699 (Tri. All.) and also raised the ground of violation of principles of natural justice. 4. Learned Commissioner (Appeals) observed that the Ruling in the case of Sony India was pronounced relating to legal position prior to amendment by Notification No. 93/2008-Cus. The Delhi High Court examined the retrospective applicability of the amending notification. Hence, the ruling of Delhi High Court in the case of Sony India (supra) is not applicable in the facts of the present case. He further placed reliance on the following rulings: i) CMS Info System Ltd.,-2017 (349) ELT 236 (Bom.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, and mechanism for refund is incorporated by reference into the Customs Tariff Act only sofar as may be applicable . Since SAD levied under Section 3(5) is refundable only on subsequent sale (i.e. the point at which sales tax/VAT liability arises), it is the opinion of this court (High Court) that no limitation period can possibly be imposed for advancing a refund claim. This is because the right to claim refund only accrues to the importer on sale, an entirely market driven event, is complete. Given the vagaries of the market, the importer has limited control over when the sale is complete. To uphold a limitation period starting from the date of payment of duty, as prescribed in the amending notification, would amount to allowing the commencement of a limitation period for refund claims before the right of refund has even accrued. To this extent, the Court is of the opinion that the refund provisions under the Customs Act are inapplicable to the duties levied under Section 3(5) of the CTA. Thus, neither Section 27 nor a notification under Section 25 (1), such as the amending Notification No.93/2008-Customs dated 1.8.2008, can be used to impose a limitation period on the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned. 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 of limitation was applicable. (v) Section 27 was understood as not applying to SAD refund cases, even though it was in the statute book for many years. Yet, with the introduction of the circular and then the notification (No.93), the Customs authorities started insisting that such limitation period which was prescribed with effect from 1.8.2008 (by notification ) became applicable. 8. The Hon ble Bombay High Court in CMS Infosystem Ltd., (supra) while disagreeing with Hon ble Delhi High Court, has based its judgement of the following specific findings :- (i) By sub-section (6) of Section 3 of CTA, it is clarified that the provisions of the said Act and the Rules and Regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty chargeable under this Section as they apply in relation to the duties le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the exemption notification can the assessee/petitioners contend that the exemption notification is valid for everything else but when it comes to period of limitation therein, that is excessive or unfair, unjust and arbitrary. Once the exemption is conditional, then all the conditions therein have to be complied with. If that provides for refund, but the application in that behalf is to be made within a specific period, then, that cannot be said to be excessive and arbitrary, far from being unfair, unjust and unreasonable. It cannot be termed illegal 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 consistent with that provision, even the special exemption notification (as amended) carries the same st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional duty of customs. In such circumstances and when that stipulation is challenged, the view taken by the Hon ble High Court of Delhi cannot be agreed with. 9. From the perusal of both the judgements, I find that the Hon ble Bombay High Court has not disturbed or distinguished the following findings of Hon ble Delhi High Court in Sony India:- (1) Right to claim refund of duty in terms of Notification accrues to the importer only when the resale takes place. Therefore, the exemption provided in the Notification is conditional on subsequent sale. (2) The provisions of the Customs Tariff Act or the rules and mechanism for refund is incorporated by reference to the CTA only so far as may be applicable. 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 or value added tax, local tax or any other charges for the time being leviable on a like article, ; the rate of duty where the terms of imposition of SAD would be spelt out in the notification. The regime existing before the Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification 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 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 matters 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 case. 11. Therefore, by following the judgement of the Hon ble Delhi High Court in Sony India (supra), the appeal filed by the appellant is allowed and the impugned order is set aside. The appellant is entitled to consequential benefits, in accordance with law. (Operative part of the order pronounced in open Court). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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