SAD refund claims under section 3(5) not subject to one-year limitation from N/N. 93/2008 payment date

CESTAT Chandigarh held that the one-year limitation period for filing SAD refund claims under N/N. 93/2008 dated 01.08.2008 is not applicable. Following Delhi HC's decision in Sony India Pvt. Ltd. vs. Commissioner of Customs, the tribunal ruled that since additional duty under section 3(5) of Tariff Act is refundable only upon subsequent sale, no limitation can be imposed from the date of payment. The court emphasized that limitation periods can only be introduced through legislation, not notifications, and section 27 of Customs Act does not apply to such refund claims.

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Issues Involved:
1. Applicability of the time limit for filing refund claims of Special Additional Duty (SAD) by importers.

Summary:

Issue 1: Applicability of One-Year Time Limit for Filing Refund Claims of SAD

Facts:
The appellant imported PVC resins and paid customs duty, countervailing duty, and SAD u/s 3(5) of the Customs Tariff Act, 1975. The appellant sought a refund of the SAD paid, which was rejected by the Assistant Commissioner and upheld by the Commissioner (Appeals) on the grounds that the refund claim was filed beyond the one-year time limit stipulated in the notification dated 01.08.2008.

Legal Background:
The notification dated 14.09.2007, issued u/s 25(1) of the Customs Act, 1962, exempts goods imported for subsequent sale from the whole of the additional duty of customs, subject to certain conditions. This notification was amended on 01.08.2008 to include a one-year time limit for filing refund claims.

Arguments:
- The appellant relied on the Delhi High Court's decision in Sony India Pvt. Ltd. vs. Commissioner of Customs, New Delhi [2014 (304) E.L.T. 660 (Del.)], which held that the one-year limitation period introduced by the notification dated 01.08.2008 cannot be applied retrospectively and is not applicable for prospective cases either.
- The department relied on the Bombay High Court's decision in CMS Info System Ltd vs. Union of India [2017 (349) E.L.T. 236 (Bom)], which upheld the one-year limitation period.

Tribunal's Analysis:
- The Tribunal considered the provisions of section 3(8) of the Tariff Act and section 27 of the Customs Act, 1962, which deal with claims for refund of duty.
- The Delhi High Court in Sony India held that no limitation period can be imposed for filing a refund claim for SAD, as the right to claim refund accrues only upon the subsequent sale of the imported goods, which is a market-driven event. The High Court concluded that the period of limitation under section 27 of the Customs Act would not apply to refund claims under the notification dated 01.08.2008.
- The Tribunal noted that the Bombay High Court in CMS Info System did not consider the conditions set out in the notification dated 14.09.2007 and focused solely on the one-year limitation period.

Conclusion:
The Tribunal followed the Delhi High Court's decision in Sony India and held that the one-year time limit for filing refund claims of additional duty of customs paid on imported goods, as stipulated in the notification dated 01.08.2008, is not applicable. The reference was answered in favor of the appellant, stating that the limitation period would not apply.

Order:
"The time limit imposed upon an importer for filing a refund claim of 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 said additional duty of customs in terms of the notification dated 01.08.2008 would not be applicable in view of the judgment of the Delhi High Court in Sony India Pvt. Ltd. vs. Commissioner of Customs, New Delhi [2014 (304) E.L.T. 660 (Del.)]."

Next Steps:
The papers were directed to be placed before the Division Bench of the Tribunal for deciding the appeal.

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