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TMI Blog2024 (6) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the amendment was made by Notification dated 01.08.2008 which provides that the claim for refund of Additional Duty has to be filed before the expiry of one year from the date of payment of the Additional Duty. The provisions of the Notification dated 14.09.2007 as amended on 01.08.2008 and the aforesaid provisions of the Tariff Act and the Customs Act were examined by the Delhi High Court in Sony India. It was held that since Additional Duty levied under section 3(5) of the Tariff Act is refundable only on a subsequent sale, no limitation can possibly be imposed for filing a refund claim from the date of payment of such Additional Duty - the High Court concluded that the period of limitation contemplated under section 27 of the Customs Act would not be applicable to a refund made under the Notification dated 14.09.2007 as amended by Notification dated 01.08.2008, more particularly when the customs authority also understood that section 27(1) of the Customs Act would not be applicable. In Pee Gee International vs. The Commissioner of Customs ICD Tughlakabad [ 2014 (4) TMI 1160 - DELHI HIGH COURT ], the Delhi High Court following its judgment in Sony India, also held that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Suzuki Motorcycle India Pvt. Ltd. [the appellant] is engaged in the import and sale of motorcycles in India. During the period April 2014, March 2015 and December 2015, the appellant imported various models of motorcycles through three Bills of Entry. The appellant paid Additional Duty under section 3(5) of the Customs Tariff Act, 1975 [the Tariff Act] that provides that if the Central Government is satisfied that it is necessary in the public interest to levy on any imported article 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 a like article on its sale, purchase or transportation in India, it may, by notification in the Official Gazzette, direct that such imported article shall, in addition, be liable to Additional Duty at a rate not exceeding four per cent of the value of the imported article as specified in that notification. 3. The notification dated 14.09.2007 issued under section 25(1) of the Customs Act, 1962 [the Customs Act] exempts goods falling within the First Schedule of the Tariff Act, when imported into India for subsequent sale from the whole of the Additional Duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the importer shall file a claim for refund of the said Additional Duty 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. The said notification dated 01.08.2008 is reproduced below:- Notification dated 1 August, 2008 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 makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 102/2007-Customs, dated the 14th September, 2007 which was published the Gazette of India, Extraordinary, vide number G.S.R. 598(E), dated the 14th September, 2007,namely, In the said notification, paragraph 2, for sub-paragraph (c), the following shall be substituted, (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. 5. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on no. 102/2007- Cus. by Notification no. 93/2008 Cus and in the said judgment, Hon ble High Court examined the retrospective applicability of the amending notification. Hence, the case of M/s. Sony India is not applicable to the present case. In the present case, imports were made in 2014 and 2015 which is much beyond amendment in parent notification. At the time of import as well as the time of filing refund application, the parent notification governing refund (.e. 102/2007- Cus) had the clause that the refund claim must be filed within one year from the date of payment of duty. There is no dispute that rejected claims were filed beyond one year from date of payment of duty. Hence, the rejection of refund claim is proper and legal. 5.4. Hon'ble Mumbai High Court in case of CMS Info System Ltd. (2017 (349) ELT 236 (Bom.)] and Hon'ble Tribunal in case of RM. Impex Pvt. Ltd. [2020-TIOL- 1271- CESTAT- Del.], J. G. Impex [ Customs Appeal No. 52393 of 2018 decided on 25.10.2018] and CC, Hyderabad Customs Vs. Surya Telecom Pvt. Ltd. (CESTAT- Hyderabad in Appeal No. CI31110 31111/2017 decided on 02.07.2018) had distinguished case of M/s Sony India and held that time limit of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which decision was upheld by the Delhi High Court in Commissioner of Customs New Delhi vs. Radial Rubber Industries [CUSAA 43/2021 decided on 19.04.2022]; and (iv) Refund cannot be denied for a mere procedural lapse and the appellant is entitled to interest under section 27A of the Customs Act. In this connection, reliance has been placed on the decision of the Supreme Court in Mangalore Chemicals Fertilizers Ltd. vs. Deputy Commissioner [1991 (55) E.L.T. 437 (S.C.)] 10. Shri M. R. Dhania, learned authorised representative appearing for the department, however, supported the impugned order and submitted that the decision of the Delhi High Court in Sony India is distinguishable as it pertains to a period that was before the amendment was made on 01.08.2008 in the Notification dated 14.09.2007. In the present case, the imports were made after the amendment was made by Notification dated 01.08.2008 and, therefore, the condition requiring refund claims to be filed within one year from the date of payment of duty would be applicable. Learned authorised representative also submitted that in terms of section 27 of the Customs Act, the refund application was required to be filed within one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the relevant portion is as follows:- 27. Claim for refund of duty. (1) Any person claiming refund of any duty or interest,- (a) paid by him; or (b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest: 15. The provisions of the Notification dated 14.09.2007 as amended on 01.08.2008 and the aforesaid provisions of the Tariff Act and the Customs Act were examined by the Delhi High Court in Sony India. It was held that since Additional Duty levied under section 3(5) of the Tariff Act is refundable only on a subsequent sale, no limitation can possibly be imposed for filing a refund claim from the date of payment of such Additional Duty. The High Court further observed that neither section 27 of the Customs Act nor the provisions of the amended Notification dated 01.08.2008 can impose a limitation period and such limitation can only be introduced by legislation. The High Court also noticed that the expression so far as may be in section 3(8) of the Tariff Act was significant and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amending notification no. 93/2008-Cus dated 1.08.2008 can be used to impose a limitation period on the right to claim refund of additional duty of customs paid under Section 3(5). If a limitation period is sought to be imposed in respect of refund claims in a case where the importer advances a refund of SADC paid owing to having incurred sales tax/VAT liability on subsequent sale of goods, it must be introduced by legislation, given the expropriatory consequences of such a limitation period. 14. The expression so far as may be in this context, under Section 27 is significant as well as instructive. The levy under CUSAA 3/2014 section 3 (5) is conditional upon the Central Government's opinion that it is necessary to counterbalance 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 exists, would be the highest of such rates and the terms of imposition of SADC 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 star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds under the notification. Further, it was also represented that the goods imported may have to be dispatched for sale to different parts of the country and that the importer may find it difficult to dispose of the imported goods and complete the requisite documentation within the normal period of six months. Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being made so as to incorporate a specific provision prescribing maximum time-limit of one year from the date of payment of duty, within which the refund could be filed by any person. It is also clarified that the importers would be entitled to refund of duties only in respect of quantities for which the prescribed documents are made available and the claims submitted within the maximum prescribed time of one year. Unsold stocks would not be eligible for refunds. Notification No. 93/2008, dated 1-8-2008 was issued prescribing the period of limitation as one year from the date of payment of additional duty of Customs. 17. Plainly, therefore, Section 27 was underst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like the regular incident of customs duty, which is definite; special additional duty is to be compensated the moment conditions for refund are fulfilled. The prevailing view of the Revenue - based upon which it issued Circulars and Notifications in 2008 that the period of limitation of one year was to be calculated based upon the date of payment of the S.A.D. and not based upon the date of further sale or payment of VAT, was held to be erroneous. In this view of the matter, it is held that the appeal, at least as far as the undisputed amounts with respect to the 5 bills of entry are concerned, requires to be allowed. xxxxxxxxx. (emphasis supplied) 18. This is also what was held by a Division Bench of the Tribunal in Radial Rubber Industries. 19. Subsequently, the Delhi High Court also examined this issue in Commissioner of Customs, New Delhi, ICD, Import vs. Bhimeshwari Overseas [2023 (1) TMI 1316 Delhi High Court] . After following the earlier a decision of the Delhi High Court in Sony India, the High Court dismissed the appeal filed by the department. The relevant portions of the judgment are reproduced below: 6. The principal issue involved in the present appeal relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in Sony India Pvt. Ltd. v. Commissioner of Customs (supra) would be binding on other benches of this Court. In CUSAA 69/2019 captioned as Commissioner of Customs v. Tanvir Trading Import, this Court observed that it found no reasons to differ with the aforesaid view and, accordingly, dismissed the appeal. 13. We are of the view that the present appeal is required to meet a similar fate. (emphasis supplied) 20. The Special Leave Petition filed by the department to assail the aforesaid judgment of the Delhi High Court in Bhimeshwari Overseas was dismissed by the Supreme Court in Commissioner of Cusotms (Import), ICD, New Delhi vs. Bhimeshwari Overseas [2023 (385) E.L.T. 807 (S.C.)] and the order is reproduced below: 2. This Court is of the opinion that the impugned order does not call for interference. The special leave petition is accordingly dismissed. 3. Pending application (s), if any, also stand disposed of. 21. The Delhi High Court also examined this issue in Commissioner of Customs, New Delhi, Import vs. Nanak Electronics Pvt. Ltd. [2023 (1) TMI 1315 Delhi High Court] and an order similar to the order passed by the Delhi High Court in Bhimeshwari Overseas was passed. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no subsequent sale and the documents evidencing that, as also proof of payment of the sales tax or local taxes are required to be produced, that their production is also mandated in a particular period and within a particular time limit is not something which we are required to call upon and decide. We have before us a case of rejection of a refund application simply because it was not filed within one year from the date of payment of the additional duty of customs. 23. It would be seen from the aforesaid paragraphs of the judgment of the Bombay High Court that the contention that an importer has to pay appropriate sales tax or value added tax on the sale and also provide copies of documents with the refund claim, otherwise the refund would not be admissible was not examined by the Bombay High Court for the reason that it was not possible to guess whether the refund application would be held non-maintainable on these grounds. The High Court also observed that this issue was not required to be decided by the High Court because High Court was dealing with a case where the refund application had been rejected because it was not filed within one year from the date of payment of Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch imported goods. These conditions were examined by the Delhi High Court in Sony India while arriving at a conclusion that the limitation provided in the Notification dated 01.08.2018 that the refund has to be made within a period of one year from the date of payment of Additional Duty has to be read down in as much as the right to claim refund could accrue to an importer only when the subsequent sale is completed and given the vagaries of the market, the importer has limited control over when the sale would be complete. It is for this reason that the Delhi High Court held that to allow the limitation period to start from the date of payment of duty as prescribed under the amended notification, would allow commencement of a limitation period for refund even before the right to claim refund actually accrued. The Delhi High Court, therefore, held that neither section 27 of the Customs Act nor the amended notification dated 01.08.2008 can impose a limitation period on the right of an importer to claim refund of Additional Duty and in any case such limitation can only be introduced by legislation. The Division Bench of the Tribunal in JG Impex relied upon 27 of the Customs Act, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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