TaxTMI 
TaxTMI 
2020 (2) TMI 1212
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.... was claimed beyond the period stipulated. 2. The respondent had paid Additional Duty of Customs [Additional Duty] under section 3(5) of the Customs Tariff Act, 1975 [the Tariff Act] that provides that if the Central Government is satisfied that it is necessary in the public interest to levy on any imported article such Additional Duty as would counter- balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India, it may, by notification in the Official Gazzette, direct that such imported article shall, in addition, be liable to an Additional Duty at a rate not exceeding four per cent of the value of the imported article as specified in that notification. 3. The notification dated 14 September, 2007 issued under section 25(1) of the Customs Act, 1962 [the Customs Act] exempts goods falling within the First Schedule of the Tariff Act, when imported into India for subsequent sale from the whole of the Additional Duty of customs leviable under section 3(5) of the Tariff Act. However, the exemption contained in the notification shall be given effect to upon fulfillment of cert....
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.... refund of the said Additional Duty paid on the imported goods with the jurisdictional customs officer before the expiry of one year from the date of payment of the said Additional Duty. The said notification dated 1 August, 2008 is reproduced below:- Notification dated 1 August, 2008 "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 102/2007-Customs, dated the 14th September, 2007 which was published the Gazette of India, Extraordinary, vide number G.S.R. 598(E), dated the 14th September, 2007,namely, In the said notification, paragraph 2, for sub-paragraph (c), the following shall be substituted, (c) the importer shall file a claim for refund of the said 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 the said additional duty of customs;". 5. The respond....
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....Representative of the Department has submitted that:- (i) The Commissioner committed an error in relying upon the judgment of the Delhi High Court in Sony India in as much as in the said case the goods had been imported prior to the issue of the notification dated 1 August, 2008 which had introduced the limitation of filing a refund claim within one year from the date of payment of the Additional Duty, whereas in the present case the Bills of Entry pertained to a period after 1 August, 2008; (ii) The Special Leave Petition filed by the Department against the judgment of the Delhi High Court in Sony India was dismissed on the ground of limitation but the question of law was kept upon; (iii) The Bombay High Court in CMS Info System Ltd. v/s Union of India, Ministry of Finance and others [2017 (349) ELT 236 (Bom.)] held that the refund claim has to be filed before the expiry of one year from the date of payment of Additional Duty; (iv) The Division Bench of the Tribunal at Delhi in Commissioner of Customs, New Delhi (ICD TKD) (Imports) v/s J G Impex Pvt. Ltd. [Custom Appeal No. 52393 of 2018 decided on 25 October, 2018] distinguished Sony India and ....
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....peal relates to two Bills of Entry, both dated 19 March, 2015, for which Additional Duty to the extent of Rs. 1,58,137/- was paid by the respondent, under the provisions of section 3(5) of the Tariff Act. The respondent had claimed refund of this Additional Duty in view of the notification dated 14 September, 2007 by notificaiton. Under the said notification, exemption has been granted to the goods falling within the First Schedule of the Tariff Act, when imported into India for subsequent sale, from the whole of the Additional Duty leviable thereon under section 3(5) of the Tariff Act, subject to certain conditions. The first condition set out is that the importer shall pay all duties, including the Additional Duty leviable thereon, as applicable, at the time of importation of the goods. The second condition is that the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the Additional Duty levied under sub-section (5) of section 3 of the Tariff Act, shall be admissible. The third condition is that the importer shall file the claim for refund of the Additional Duty pai....
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....gh Court further observed that neither section 27 of the Customs Act nor the provisions of amended notification dated 1 August, 2008 can impose a limitation period as such limitation can only be introduced by legislation. The High Court also noticed that the expression "so far as may be" in section 3(8) of the Tariff Act was significant and this would mean that the provisions of Customs Act would be applicable only "to the extent possible". Thus, the High Court concluded that the period of limitation contemplated under section 27 of the Customs Act would not be applicable to a refund made under the exemption notification, more particularly when the customs authority also understood that section 27(1) of the Customs Act would not be applicable. The relevant portion of the judgment of the High Court is reproduced below:- "10. That the importer is required to produce invoices of sale, documents evidencing payment of sales tax/VAT etc. clearly indicates that the benefit of this notification can be availed only once sale of the imported goods is complete. The exemption is clear in its intent to allow a refund of the SADC paid under Section 3(5) of the CTA because the importer h....
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....ate of duty - where more than one levy exists, would be the highest of such rates and the terms of imposition of SADC would be spelt out in the notification. In this case, the regime existing before the notification of 2008 did not specify any period of limitation - and perhaps advisedly so. Some customs authorities apparently started applying section 27, drawing inspiration from section 3(8) which led to confusion. In Notification No.102/2007-Customs dated 14.09.2007 there was no period of limitation; by Circular No.6/2008-Customs, an amending notification providing for one year period from the date of payment of the additional duty of customs was issued, through Notification No.93/2008-Customs dated 1.8.2008, amending Para 2(c) of the 2007 Notification. The net effect of these was that a one year period was insisted upon for refund applications. That period was calculable from date of payment of duty (SAD). Dr Partap Singh & Anr v. Director of Enforcement, Foreign Exchange Regulation Act & Ors., 1985 (3) SCC 72 is an authority for the proposition that the use of the phrase "so far as may be" in a later statute, with reference to provisions in an earlier statute, means that the pr....
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....cto 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 upon the date of further sale or payment of VAT, was held to be erroneous. In this view of the matter, it is held that the appeal, at least as far as the undisputed amounts with respect to the 5 bills of entry are concerned, requires to be allowed. So far as the 6th bill of entry is concerned, appellant asserts that the C.B.E. & C. Circular No. 16/2008 paragraph (viii) covers the aspect and that payments made by clearing or forwarding agents to satisfy VAT demands would also fall in the legitimate claim that can be pressed by importers. In these circumstances, the refund application of the appellant with respect to bill of entry dated 5-11-2007 for the sum of Rs. 82,123/- is....
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....year from the date of payment of Additional Duty, has to be read down. The decision of the Delhi High Court in Sony India was binding on the Tribunal but it has been distinguished for a reason that is not borne out from a plain reading of the conditions set out in the notification. 22. Learned Authorized Representative of the Department has also submitted that the judgment of the Delhi High Court in Sony India would not be applicable for the reason that the refund in that case was filed at a time when the amended notification dated 1 August, 2008 had not been issued. 23. This submission cannot be accepted for the simple reason that the Delhi High Court has not allowed the refund claims for the said reason. It has allowed the refund claims as the limitation of one year provided for in the amended notification dated 1 August, 2008 has to be read down in as much as the right to claim refund could accrue to an importer only when the subsequent sale is completed and given the vagaries of the market, the importer has limited control over when the sale would be complete. It is for this reason that the Delhi High Court held that to allow the limitation period to start from the date o....
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....nt 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." 25. It would be seen from the aforesaid paragraphs of the judgment of the Bombay High Court that the contention that an importer has to pay appropriate sales tax or value added tax on the sale and also provide copies of documents with the refund claim, otherwise the refund would not be admissible was not examined by the Bombay High Court for the reason that it was not possible to guess whether the refund application would be held non-maintainable on these grounds. The High Court also observed that this issue was not required to be decided by the High Court because High Court was dealing with a case where the refund application had been rejected because it was not filed within one year from the date of payment of Additional Duty. The Delhi High Court, on the other hand specifically dealt wit....
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....stions for consideration was whether the interpretation given by the Calcutta High Court to Section 167 of the Sea Customs Act, 1878 would be binding on authorities functioning within the jurisdiction of the High Court and the Supreme Court held that "it is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunals subject to its supervision should conform to the law laid down by it. ........We, therefore, hold that the law declared by the highest Court in the State is binding on authorities or Tribunals under its superintendence.........". This decision has been followed by the Bombay High Court in CIT v. Godavaridevi Saraf reported in 1978 (2) E.L.T. (J 624). 10.1 In the case of U.P. Laminations v. Collector of Central Excise, Kanpur reported in 1988 (35) E.L.T. 398 (T), the Tribunal has followed the Supreme Court judgment in the case of East India Commercial Co. case and set aside the show cause notice issued against the appellants therein as it was in direct violation of the law laid down by the Allahabad High Court within whose jurisdiction both the manufacturer and the Collector of Central Excise were situated. 10.2 In a rec....