TaxTMI 
TaxTMI 
2020 (12) TMI 503
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....f Special Additional Duty of Rs. 2,34,274/- levied under sub-section (5) of Section 3 of the CTA, 1975 in terms of Notification no.102/2007-Customs as amended by Notification No.93/2008-Cus, on 22.08.16 as per details below:- S.No. B/E No. and date TR-6 Dated Amount of SAD paid Amount of refund claimed 1. 9635301 dt.20.06.2015 23.06.2015 100290.60 100290.60 2. 2206249 dt.11.08.2015 11.08.2015 100352.20 100352.20 3. 2220996 dt.12.08.2015 13.08.2015 33631.60 33631.60 Total 234274.40 234274.49 4. Notification No.102/2007-Customs exempts the goods from SAD falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India on subsequent sale, from the whole of the Additional duty of customs leviable thereon under sub-section (5) of Section 3 of the said Customs Tariff Act (hereinafter referred to as SAD), subject to following the conditions mentioned therein. The conditions read as under:- (a) the importer of the said goods shall pay all duties, including the special additional duty (SAD) of customs leviable thereon, as applicable, at the t....
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....ommissioner (Appeals). 9. Heard both the sides and perused the records. 10. Ld. Authorised Representative for Revenue urges that the time limit whether it can be imposed for SAD refund has been agitated till Hon'ble Supreme Court in the matter of CCE, New Delhi Vs. Sony India Pvt. Ltd., wherein dismissing the SLP on the ground of limitation of Revenue vide an Order dated 26.02.2016, it was observed that - "needless to say, the question of law is kept open". It is further urged that on the same issue SLP of Revenue has been admitted in the case of Wilhelm Textile India Pvt. Ltd. being SLP (C.No.1507 /2017) vide order dated 15.04.2019. 11. It is further urged that Special Additional Duty is levied under Section 3 (5) of the Customs Tariff Act, if the Central Government is satisfied that it is necessary in the public interest to levy on any imported articles. Whether on such article, duty is levaible under sub-section (1) i.e. customs duty or as the case may be, sub-section (3) i.e. counterveiling duty in lieu of excise duty or not. Such additional duty as would counter-balance the "sales tax (value added tax, local tax, or any other charges‟ for the time being leviable....
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....‟s response to offset any advantage, which the importer might secure by way of non-discriminatory levy while importation of goods, at cost or prices lower than could be obtained by a domestic manufacturer. A discriminatory tax could not have been levied giving India‟s obligation as a participant in WTO & having regard to its treaty obligation. 15. It is further urged that pursuant to Sony India's Judgement of Delhi High Court, the Hon'ble Bombay High Court in CMS Infosystems Ltd. Vs. Union of India - 2017 (349) ELT 236 has taken a different view after considering various rulings including in the case of Sony India (supra) by Delhi High Court. The Bombay High Court have opined that Rules and Regulations under the Customs Act including those relating to refund and exemption are made applicable even to the Tariff Act, and the duties mentioned thereunder. Therefore, a provision for refund and exemption from such duties, can be made by relying on the provisions of the Customs Act. The procedure for refund is given in Section 26 of the Customs Act, wherein it is provided that any person claiming refund of any duty or interest paid or borne by him, may make an application i....
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....n Sony India (supra), the limitation period of "one year‟ from the date of payment of SAD has been upheld. Accordingly, prays for allowing the appeal of the Revenue and setting aside the impugned order. 18. Opposing the appeal, ld. Counsel, Shri Sunil Kumar urges that the final order of this Tribunal in JG Impex (supra) is erroneous, as the Tribunal has wrongly based its findings on the erroneous opinion that for claiming the refund of SAD, nothing else is to happen or to be done by the assessee/importer after the payment of SAD and thus, no reliance can be placed on the same. He further urges that the principle laid down by the Hon'ble Delhi High Court in Sony India Ltd. (supra) is that limitation cannot start to run before the date when the right to refund claim crystallises. Such right to refund crystallises or arises only on sale of the goods subsequent to import. Under Notification No.102/2007 for granting refund of SAD, the two essential conditions to be fulfilled by the importer are sale/resale of the goods on which VAT /ST has been paid. Thus, as rightly held by the Hon'ble Delhi High Court, limitation cannot start to run prior to the sale of the imported goods. He....
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....an possibly be imposed for advancing a refund claim. This is because the right to claim refund only accrues to the importer on sale, an entirely market driven event, is complete. Given the vagaries of the market, the importer has limited control over when the sale is complete. To uphold a limitation period staring from the date of payment of duty, as prescribed in the amending notification, would amount to allowing the commencement of a limitation period for refund claims before the right of refund has even accrued. To this extent, the Court is of the opinion that the refund provisions under the Customs Act are inapplicable to the duties levied under Section 3(5) of the CTA. Thus, neither Section 27 nor a notification under Section 25 (1), such as the amending Notification No.93/2008-Customs dated 1.8.2008, can be used to impose a limitation period on the right to claim refund of additional duty of customs paid under Section 3(5). If a limitation period is sought to be imposed in respect of refund claims in a case where the importer advances a refund of SAD paid, owing to having incurred sales tax/VAT liability on subsequent sale of goods, it must be introduced by legislation, give....
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....itation was applicable. (v) Section 27 was understood as not applying to SAD refund cases, even though it was in the statute book for many years. Yet, with the introduction of the circular and then the notification (No.93), the Customs authorities started insisting that such limitation period which was prescribed with effect from 1.8.2008 (by notification ) became applicable. 20. The Hon'ble Bombay High Court while disagreeing with Hon'ble Delhi High Court has based its judgement of the following specific findings :- (i) By sub-section (6) of Section 3 of CTA, it is clarified that the provisions of the said Act and the Rules and Regulations made thereunder, including those relating 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. (ii) Though the CTA enables the levy of the Additional duty equal to excise duty, sales tax, etc., eventully, it is an Act to consolidate and amend the law relating to customs duty. The duties which are levied have then to be specified and for effective and proper recovery. Even when there is....
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....e complied with. If that provides for refund, but the application in that behalf is to be made within a specific period, then, that cannot be said to be excessive and arbitrary, far from being unfair, unjust and unreasonable. It cannot be termed illegal as well for the simple reason, that sub-section (1) of Section 27 of the Customs Act, 1962, which enables claiming of refund by making an application itself speaks of one year outer limit. That is never challenged, including in the present proceedings. That the period of one year commences from the payment of the duty. If that is how Section 27 is worded and every duty is included in its ambit and scope, then, an application seeking refund of the same has to abide by it, including the bar of limitation contained therein. That is consistent with that provision, even the special exemption notification (as amended) carries the same stipulation or condition. The insistence on complying with it cannot be said to be imposing an unreasonable, unfair and unjust restriction. Once the nature of the right is considered, the submissions made by Mr. Patil/petitioner cannot be agreed with. There is no vested, much less absolute right in the petit....
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....ings of Hon'ble Delhi High Court:- (1) Right to claim refund of duty in terms of Notification accrues to the importer only when the sale take place. Therefore, the exemption provided in the Notification is conditional on subsequent sale. (2) The provisions of the customs Act or the rules and mechanism for refund is incorporated by reference into the CTA only "so far as may be" applicable. The expression "so far as may be"in this context, under Section 27 is significant as well as instructive. The levy under Section 3(5) is conditional upon the Central Government‟s opinion that it is necessary to "counter-balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article," ; the rate of duty - where the terms of imposition of SAD would be spelt out in the notification. 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) of Tariff Act, which lead to confusion. In Notification No. 102/2007-Cus., dated 14.09.2007, there was no prescribed perio....