TaxTMI 
TaxTMI 
2015 (10) TMI 1099
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.... appeal is whether an importer is entitled to interest beyond the period of three months under Section 27A of the Act on refund of Special Additional Duty (SAD) under Notification No. 102/2007 issued under section 25 of the Act in the absence of a specific provision for payment of interest in the said Notification as subsequently clarified in Para 4.3 of the Circular No. 6/2008-Cus dated 28th April, 2008 issued by the Central Board of Excise and Customs (CBEC). 7. The brief facts are that the Respondent filed a claim on 2nd March, 2010 in terms of Notification No. 102/2007 for refund of SAD paid by it. The refund application was rejected on 18th June, 2010 on the ground that the period of limitation had expired. The appeal filed by the Respondent against the said order was allowed by the Commissioner of Customs (Appeals) on 4th January, 2011. The refund application was remanded to the Assistant Commissioner for a fresh consideration. Thereafter, the refund was granted. However, the claim of the Respondent for interest on the refunded SAD was rejected by the Assistant Commissioner by an order dated 30th March, 2012. 8. The appeal against the said order was dismissed by the Com....
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....g 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. " 12. As a result, the provisions of the Act in so far as they relate refund of duty and interest payable on the refunded amount of duty in the event of delay in refund, as provided by Sections 27 and 27 A of the Act would apply to refund of SAD levied under Section 3 of the CTA as well. The relevant portions of Sections 27 and 27A of the Act which are relevant for the purposes of the present case read as under: "27. Claim for refund of duty (1) Any person claiming refund of any duty or interest,- (a) paid by him (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. Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be de....
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....n such duty], paid by the importer [or the exporter, as the case may be], if he had not passed on the incidence of such 1[duty and interest, if any, paid on such duty] to any other person; (b) the [duty and interest, if any, paid on such duty], on imports made by an individual for his personal use; (c) the [duty and interest, if any, paid on such duty] borne by the buyer, if he had not passed on the incidence of such [duty and interest, if any, paid on such duty], to any other person; (d) the export duty as specified in section 26; (e) drawback of duty payable under sections 74 and 75; (f) the [duty and interest, if any, paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of [duty and interest, if any, paid on such duty] has not been passed on by the persons concerned to any other person. .......... 27A. Interest on delayed refunds If any duty ordered to be ref....
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....hs. However, the question that arose was whether the said time limit would automatically apply to refunds made under Notification No.102/2007. The circular clarified in para 4.3 as under: "4.3. With the extension of time limit and the requirement to file claims on a monthly basis, Board feels that the number of refund claims should be manageable for disposal within the normal period of three months. Further, in the absence of specific provision for payment of interest being made applicable under the said notification, the payment of interest does not arise for these claims. However, Board directs that the field formations shall ensure disposal of all such refund claims under the said notification within the normal period not exceeding three months from the date of receipt." 15. The issue that arises as far as the present case is concerned is whether the Department was justified in denying interest on the amount directed to be refunded to the Respondent by resorting to para 4.3 of the above circular. 16. While, the CESTAT has relied on the decision of the Madras High Court in KSJ Metal Impex (P) Ltd. (supra), considering that the said decision of the learned Single Ju....
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....mposition of a period of limitation for the first time, without statutory amendment, through a notification, therefore could not prevail. 18. For these reasons, this Court holds that the amending notification must be read down to the extent that it imposes a limitation period. The question of law framed is therefore, answered in favour of the assessee and against the revenue. The appeal accordingly succeeds and is allowed without any order as to costs." 19. The issue dealt with by this Court, in the above decision in Sony India Pvt. Ltd. v. The Commissioner of Customs (supra) was whether a subordinate piece of legislation, like a circular issued by the CBEC, can prevail over the statutory provision concerning limitation. The Court was clear that the imposition of a period of limitation for the first time through a notification "without statutory amendment" was legally impermissible. 20. In the context of the present case, Sections 27 and 27A of the Act form a statutory scheme for grant of refunds. Section 27A unambiguously states that where there is a delay in making the refund, interest would be payable on the amount of refund, in the manner stipulated under Section....