2021 (5) TMI 483 - AT - Customs

Importers' Refund Claim Time Limit: Larger Bench to Clarify

The Tribunal referred the matter to a Larger Bench to determine if the one-year time limit for filing a refund claim under Notification No.93/2008-Cus ... Refund of SAD - rejection on the ground of time limitation - time limit prescribed for filing refund claim is one year from the date of payment of SAD or not - N/N. 102/2007-Cus dated 14.9.2007 as amended by N/N.93/2008-Cus dated 1.8.2008 - HELD THAT:- As per the observations made by the Hon’ble Apex Court in CC (PREVENTIVE), MUMBAI VERSUS M/S M. AMBALAL & CO. [2010 (12) TMI 16 - SUPREME COURT], the exemption notifications in question are to be interpreted liberally. N/N. 93/2008-Cus prescribes that exemption from special CVD in specific is not available without VAT/Sales tax is paid by the importer. Further mandates notification is that SAD which has been levied on the importer is to safeguard the VATA/Sales tax is to be paid by the importer/trader at the time of sale of the goods. Therefore, if the importer sells the goods and make payment of VAT/Sales tax then the importer is entitled to claim refund of SAD paid by them at the time of import of the goods. If the goods are not sold by the importer, the importer is not entitled for refund of SAD paid by him. The importer shall claim refund of such additional duty of customs paid on the imported goods with the jurisdictional Customs officer before expiry of one year from the date of payment of additional duty. COVID Pandemic situation - HELD THAT:- If importer imported goods in March, 2020, after lockdown due to the Pandemic Covid 19 in all over country, second wave of Pandemic and various parts of India is under locked down, if the importer failed to sell the imported goods, the importer shall be put on another burden of SAD which is otherwise entitled of refund on payment of VAT/Sales tax. Further, unless and until the goods are sold on payment of VAT/Sales tax, cause of action for refund of SAD does not arise, the said issue has not been addressed by the Division of this Tribunal in the case of C.C. -NEW DELHI (ICD TKD) (IMPORT) VERSUS AGGARWAL TRADING COMPANY [2018 (10) TMI 1572 - CESTAT NEW DELHI], the same has been addressed by the Single Member Bench of this Tribunal on various occasions. In that circumstance, as there are contrary views of this Tribunal, then it would be in the interest of justice, the matter needs to be referred to the Larger Bench of this Tribunal to decide the following issues: Whether the time limit prescribed for filing refund claim of SAD paid by the importer is one year in terms of Notification No. 93/2008(Cus) dated 01.08.2008 which has been issued in terms of section 25(1) of the Customs Act, 1962 without selling the imported goods by the importer within one year of payment of SAD shall be applicable or not? The Registry is directed to place the records before the Hon’ble President for constitution of Larger Bench to decide the issue. Issues Involved:1. Whether the refund claim filed by the appellant under Notification No.102/2007-Cus dated 14.9.2007, as amended by Notification No.93/2008-Cus dated 1.8.2008, is time-barred.2. Interpretation of the statutory provisions and conditions under the relevant notifications and their applicability to the case.Issue-Wise Detailed Analysis:1. Time-Barred Refund Claim:The appellant's refund claim for the special additional duty (SAD) paid during the import of plastic materials was rejected by the Commissioner (Appeals) as time-barred under Notification No.93/2008-Cus dated 1.8.2008. The appellant contended that the rejection was unjustified, as similar cases have been decided favorably by various tribunals and courts, including Mitutoyo South Asia Pvt. Ltd vs. CC, Devki Nandan J. Gupta vs. CC, and CC vs. Kevin Impex Pvt. Limited. The appellant also cited the Hon’ble Delhi High Court's decision in Sony India vs. CC, which held that the limitation period should not start before the date of sale and payment of VAT.2. Interpretation of Notifications and Legal Provisions:The core issue is whether the time limit for filing a refund claim under Notification No.102/2007-Cus, as amended by Notification No.93/2008-Cus, is one year from the date of payment of SAD. The appellant argued that the Tribunal has the liberty to decide the issue on merits when there are contrary views from different High Courts, as seen in the cases of Auto Dynamic Corporation and others. The appellant also referenced decisions where the Tribunal and courts have interpreted the notifications liberally, emphasizing the purpose of encouraging trade and avoiding double taxation.The respondent opposed this view, arguing that the decision in Sony India is not applicable to the present case. The respondent relied on other High Court decisions, including CMS Info Systems Limited vs. Union of India and CC vs. DSM Sinochem Pharmaceuticals (I) Pvt. Ltd., which upheld the time limit prescribed in Notification No.93/2008-Cus.Legal Provisions and Notifications:The judgment delved into the statutory provisions under Section 25 of the Customs Act, 1962, which empowers the Central Government to grant exemptions from duty. Notification No.102/2007-Cus provided an exemption from SAD for goods imported for subsequent sale, subject to conditions including the payment of VAT/Sales Tax. Notification No.93/2008-Cus introduced a one-year time limit for filing refund claims from the date of payment of SAD.Judgment Analysis:The Tribunal noted that the conditions in the notifications could lead to a situation where an importer is compelled to sell the goods within one year to claim a refund, which might not always be feasible. The Tribunal observed that such an interpretation could defeat the legislative intent of providing a refund to avoid double taxation. The Tribunal cited the Supreme Court's judgment in CC (Preventative) vs. M. Ambalal & Co., which emphasized that beneficial exemptions should be interpreted liberally.Conclusion:Given the conflicting views and the potential for double taxation, the Tribunal decided that the matter should be referred to a Larger Bench to resolve the issue of whether the one-year time limit for filing a refund claim under Notification No.93/2008-Cus is applicable when the importer has not sold the goods within one year of payment of SAD. The Tribunal directed the Registry to place the records before the Hon’ble President for the constitution of a Larger Bench to decide this issue.Pronouncement:The judgment was pronounced in the open Court on 13.05.2021.