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TMI Blog2024 (10) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... d Orders-In- Appeals are legally not sustainable and are set aside - appeal allowed. - HON'BLE MEMBER ( TECHNICAL ) , MR. C. L. MAHAR Shri. S. Suriyanarayanan , Advocate for the Appellant Shri. N. P. Makwana , Superintendent ( AR ) for the Respondent ORDER C. L. MAHAR The above appeals have been taken together as the facts in the above mentions appeals are identical. The issue before us for consideration is whether the appellant is entitled for the refund of SAD paid by them at the time of the import in terms of the Notification No. 102/2007-Cus. dated 17.09.2007. The department is of the view that the refund claims have been filed by the appellant with the Customs beyond the stipulated time limits of one year from the date of the payment of the duty and the lower authorities have rejected the claim of the appellant only on this ground that the period of one year from the date of the payment of the SAD have not been followed by the appellant and therefore the refunds of the SAD paid at the time on the importation has been rejected at the ground of the limitation. 2. Learned Advocate appearing for the appellant has submitted that the Hon ble Delhi High Court in case of Sony In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification dated 01.08.2008, whereas the present matter relates to imports made after the amendment was made by notification dated 01.08.2008. This notification 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. 15. At this stage it would be appropriate to take note of the provisions of section 3(8) of the Tariff Act as it stood at the relevant time and it is as follows: 3(8)The provisions of the Customs Act, 1962 (52 of 1962) 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 leviable under that Act. 16. Section 27 of the Customs Act deals with claims for refund of duty and 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 expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of this 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 once 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, this Court is of the opinion that the refund provisions under the Customs Act are inapplicable to the duties levied under Section3(5) of the CTA. Thus, neither section 27 nor a notification under section 25(1), CUSAA 3/2014 Page 8 such as 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 subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one year period of limitation was applicable. Audio plus (supra) and United Chemicals Industries (supra) are both testimony to this. It is the circulars/notifications of 2008 and No. 16/2009 which for the first time harped on the one year period of limitation. Circular No 6/2008, dated 28-4- 2008 issued by the C.B.E. C. stated that: 4. Time-Limit 4.1 in the Notification No. 102/2007-Cus, dated 14-9-2007, no specific time-limit has been prescribed for filing a refund application, Under the circumstances, a doubt has been expressed that whether the normal timelimit of six months prescribed in Section 27 of the Customs Act, would apply. In the absence of specific provision of Section 27 being made applicable in the said notification, the time-limit prescribed in this section would not be automatically applicable to refunds 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2016 on the ground of limitation, but the question of law was kept open. 19. In Pee Gee Intemational vs. The Commissioner of Customs ICD Tughlakabad [2016 (343) E.L.T. 72 (Del.)], the Delhi High Court followed its earlier judgment in Sony India and held that the limitation of one year provided for in the notification dated 01.08.2018, would not be applicable. The relevant observations are as follows: 5. This Court has recently in its judgment Sony India Pvt. Ltd. v. The Commissioner of Customs, New Delhi (CUSAA 3/2014, decided on 16-4- 2014[2014(304) E.LT. 660 (Del.)]) held that the expression so far as may be occurring in Section 3(5) of the Customs Tariff Act cannot ipso facto bring in or refer to the period of limitation prescribed in Section 27 of the Customs Act. It was held that the nature of the duty is unlike 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected merely for the reason that it was not filed within time. 22. The appeal filed by the department before the Delhi High Court against the decision of the Tribunal in Radial Rubber Industries was dismissed by the Delhi High Court on 19.04.2022 and the decision is reported in Commissioner of Customs, New Delhi vs. Radial Rubber Industries, though SLP (C) 4651 of 2023 filed by the department against the judgment of the Delhi High Court is pending before the Supreme Court 23. Subsequently, the Delhi High Court also examined this issue in Bhimeshwari Overseas. After following the earlier 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 applicability of time period to claim refund of the Special Additional Duty of Customs (SAD) on goods Imported in terms of the Notification No. 102/2007- CUS. 7. Aggrieved by the rejection of refund claimed by the Adjudicating Authority, the respondent preferred an appeal before the Commissioner of Customs (Appeals), New Delhi. The learned Commissioner of Customs (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to meet a similar fate. (emphasis supplied) 24. The Special Leave Petition filed by the department to assail the aforesaid judgment of the Delhi Hig Court in Bhimeshwari Overseas was dismissed by the Supreme Court and the decision is reported in Commissioner of Customs (Import), ICD, New Delhi vs. Bhimeshwari Overseas [2023 (385) E.L. 807(S.C.)). The order is reproduced below: 2. This Court is of the opinion that the impugned order does not call for interference. The spec leave petition is accordingly dismissed. 3. Pending application(s), if any, also stand disposed of. 25. The Delhi High Cound to examined this issue in Commissioner of Customs, New Deals, Input 7 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 and the appeler war to the order passed High Court. The Special Leave Petition filed by the department before the Supreme Court was damissed. This decision is reported in Commissioner of Customs, New Delhi, Import vs. Narak Electronics Pvt. Ltd. [2023 (7) TMI 1319- SC Order). The relevant portion is reproduced below: Delay condoned. In view of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically dealt in the decision of the Hon'ble Bombay High Court in the case of CMS Info Systems Ltd. [2017 (349) ELT 236 (Bom)] and the decision of Hon'ble Tribunal in case of Honda Siel Power Products Ltd. [2019 (369) ELT 1773 (Tri. Chennai)]. Appellants contention that the order of jurisdictional High Court is binding on the Department and the order of another High Court cannot be relied upon is not relevant as the facts and circumstances under which the order of Sony India or Pee Gee International were delivered were entirely different. The case of Sony India is for the period prior to amendment of notification 102/2007-Cus. Thus this judgment cannot be applied to present case. 6. In our view, the reasoning fumished by the Commissioner of Customs (Appeals) via order dated 11.05.2020 is flawed, as limitation cannot be prescribed by a notification. 6.1 This aspect of the matter was dealt by this Court in Sony India Pvt. Ltd. case 7. We respectfully agree with the view taken in Sony India Pvt. Ltd. and therefore, allow the instant appeal. (emphasis supplied) 27. In Commissioner of Customs (Import) vs. Gulati Sales Corporation (2018 (360) ELT., 277 (Del.), the Delhi Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not credited and set off from the sales tax and value added tax, which are State taxes. SAD is, therefore, refundable to the importer after evidence with regard to payment of appropriate sales tax or value added tax is produced. The documents and papers have to be produced before the customs authorities, checked and verified, before refund is issued. It goes without saying that the intent is that no double duty/tax-first, the form of SAD and secondly, in form of sales tax or value added tax, is to be paid. 10. Circular dated 28th April, 2008 quoted above specifically states the view and 78 understanding of the Revenue that Section 27 of the Act is not made applicable to the Notification No. 102/2007 and the time limit prescribed under the said Section would not be applicable. The Revenue notwithstanding the said understanding and their Circular, now seeks to contend and urge to the contrary. 11. In view of the aforesaid, we find that the impugned order being in consonance with the ratio in the case of Sony India (supra), no case for interference is made out. No substantial question of law. therefore arises. The appeal is dismissed, without any order as to costs. (emphasis suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this point. ***** 34. Mr. Patil would submit that the importer shall pay on sale of the said goods appropriate sales tax or value added tax, as the case may be, is equally a condition and further requirement is providing of copies of documents along with refund claim. Else, no refund is admissible. We are of the opinion that it is not possible to guess as to whether the refund application would be held to be non-maintainable purely on the grounds or for the reasons suggested. If it is made within a period of one year from the date of payment of the additional duty of customs, then, because there is 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. (emphasis supplied) 31. It would be seen from the aforesaid paragraphs of the judgment of the Bombay High Court that the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said conditions have been fulfilled. Thus, the limitation of one year period from the date of payment of additional duty contemplated in the amending notification dated 01.08.2008 cannot be examined dehors the conditions stipulated in the notification dated 14.09.2007. 34. The Bombay High Court in CMS Info System did not consider it necessary to examine the conditions set out in the notification dated 14.09.2007 for the reason that the application for refund had been rejected only on the ground that it had been filed beyond the period of one year and not for non satisfaction of the conditions set out in the said notification dated 14.09.2007. 35. In view of the above aforesaid discussion, it would be appropriate to follow the view taken by the Delhi High Court in Sony India. 36. In any view of the matter, the issue as to which judgment of the High courls should be followed if conflicting view have been takne was decided by a Larger Bench (a five Member Bench) of the Tribunal in Colloector of Central Excise, Chanddigarh Vs. Kashmir Conductors (1997 (96) ELT 257 (Tro/ ) one issue that was addressed by the Larger Bench was what should be done when the Tribunal is faced with confl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 192-CESTAT HYDERABAD]. 41. In Khazana, a leamed member of the Tribunal did not follow the decision of the Delhi High Court in Sony India only for the reason that it dealt with a situation that existed prior to the issue of the notification dated 01.08.2008 that introduced the limit of one year. In Hariyana International, the Division Bench of the Tribunal did not consider the judgment of the Delhi High Court in Sony India. In Nav Bharat Trading Corporation, the Division Bench of the Tribunal relied upon section 27 of the Customs Act, which section was held to be inapplicable by the jurisdictional Delhi High Court in Sony India. In Surya Telecom, the decision of the Bombay High Court in CMS Infosys System was relied upon. 42. These four decisions of the Tribunal have distinguished the judgment of the Delhi High Court in Sony India for reasons which are not tenable. The decision of the Delhi High Court in Sony India had also taken into consideration the amended notification dated 01.08.2008 43. The decisions of the Tribunal in JG Impex, Khazana, Hariyana International, Nav Bharat Trading Corporation and Surya Telecom, for the reasons stated above, do not lay down the correct law. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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