2018 (12) TMI 1194 - AT - Customs

Tribunal rules refund claims timely under customs notification, grants appellants relief

The Tribunal ruled in favor of the appellants, holding that the refund claims were not time-barred under Notification No. 102/2007-Customs. The Tribunal ... Refund of SAD - Denial on the ground of time limitation - N/N. 102/2007-Cus. Dated 14.09.2007 - Held that:- The SAD is payable by an assessee for setting off of VAT/ST/CST is payable by the appellant being a trader. Unless and until VAT/ST/CST is paid by the assessee, they cannot file refund claim, therefore, it is required to be seen on which date cause of action arose of filing the claim of refund. Admittedly, the relevant date in such a case as per Section 11B of the Central Excise Act, 1944, when is the cause of action arose i.e. the date of payment of VAT/ST/CST. From that date, within one year, the assessee required to file the refund claim. Therefore, the relevant date (in these matters) is the date of payment of VAT/ST/CST - in the present case, the refund claims have been filed by the appellants within one year from the date of payment of VAT/ST/CST. The refund claims cannot be rejected on ground of limitation - appeal allowed - decided in favor of appellant. Issues: Refund claim denial under Notification No. 102/2007-Cus. Dated 14.09.2007 as time-barred.Analysis:1. The appellants appealed against the denial of refund claims under Notification No. 102/2007-Customs, which required the claims to be filed within one year from the date of payment of Special Additional Duty (SAD). The appellants imported goods, paid duty, and SAD at the time of import, which was refundable if the goods were sold in the open market on payment of Sales Tax/VAT/CST. The refund claims were rejected as they were not filed within one year from the payment of SAD, as mandated by Notification No. 93/2008-Customs. The issue was whether the refund claims were time-barred.2. The appellants argued that their case was similar to precedents set by various judgments, including those of M/s Vainik Spining Mills Ltd., M/s Gaio Mall and Sons, and M/s Goyal Impex & Industries Ltd. They contended that the refund claims were within time limits based on these decisions. However, the Ld. AR cited the decision of the Hon'ble High Court of Bombay in CMS Info Systems Ltd. Vs. Union of India, which supported the rejection of the refund claims as time-barred. The conflicting decisions of different High Courts created a legal dilemma.3. The Tribunal noted the contradictory views of the High Courts and asserted its authority to decide the issue independently. The Tribunal emphasized that the relevant date for filing refund claims was the date of payment of VAT/ST/CST, not the payment of SAD. As per Section 11B of the Central Excise Act, the cause of action for filing a refund claim arose from the payment of VAT/ST/CST. Since the refund claims were filed within one year from the payment of VAT/ST/CST, they were not time-barred. This interpretation aligned with previous Tribunal decisions in similar cases.4. Consequently, the Tribunal ruled in favor of the appellants, holding that the refund claims were not time-barred and were entitled to the refund. The Tribunal set aside the impugned orders and allowed the appeals with consequential relief, based on the facts presented and the provisions of law. The decision was made after considering the arguments from both sides and analyzing the legal framework governing the refund claims under the relevant notifications.End of Analysis.