TaxTMI 
TaxTMI 
2024 (6) TMI 290
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....pril 2014, March 2015 and December 2015, the appellant imported various models of motorcycles through three Bills of Entry. The appellant paid 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 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 14.09.2007 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 give....
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.... shall file a claim for 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 01.08.2008 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 appella....
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....ated to the period prior to amendment of Notification no. 102/2007- Cus. by Notification no. 93/2008 - Cus and in the said judgment, Hon'ble High Court examined the retrospective applicability of the amending notification. Hence, the case of M/s. Sony India is not applicable to the present case. In the present case, imports were made in 2014 and 2015 which is much beyond amendment in parent notification. At the time of import as well as the time of filing refund application, the parent notification governing refund (.e. 102/2007- Cus) had the clause that the refund claim must be filed within one year from the date of payment of duty. There is no dispute that rejected claims were filed beyond one year from date of payment of duty. Hence, the rejection of refund claim is proper and legal. 5.4. Hon'ble Mumbai High Court in case of CMS Info System Ltd. (2017 (349) ELT 236 (Bom.)] and Hon'ble Tribunal in case of RM. Impex Pvt. Ltd. [2020-TIOL- 1271- CESTAT- Del.], J. G. Impex [ Customs Appeal No. 52393 of 2018 decided on 25.10.2018] and CC, Hyderabad Customs Vs. Surya Telecom Pvt. Ltd. (CESTAT- Hyderabad in Appeal No. CI31110 & 31111/2017 decided on 02.07.2018) had dist....
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....ommissioner of Customs - New Delhi (ICD TKD) vs. Radial Rubber Industries [2020 (2) TMI 1212 - Cestat New Delhi], which decision was upheld by the Delhi High Court in Commissioner of Customs New Delhi vs. Radial Rubber Industries [CUSAA 43/2021 decided on 19.04.2022]; and (iv) Refund cannot be denied for a mere procedural lapse and the appellant is entitled to interest under section 27A of the Customs Act. In this connection, reliance has been placed on the decision of the Supreme Court in Mangalore Chemicals & Fertilizers Ltd. vs. Deputy Commissioner [1991 (55) E.L.T. 437 (S.C.)] 10. Shri M. R. Dhania, learned authorised representative appearing for the department, however, supported the impugned order and submitted that the decision of the Delhi High Court in Sony India is distinguishable as it pertains to a period that was before the amendment was made on 01.08.2008 in the Notification dated 14.09.2007. In the present case, the imports were made after the amendment was made by Notification dated 01.08.2008 and, therefore, the condition requiring refund claims to be filed within one year from the date of payment of duty would be applicable. Learned authorised represen....
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....er this section as they apply in relation to the duties leviable under that Act." 14. Section 27 of the Customs Act deals with claims for refund of duty and the relevant portion is as follows:- "27. Claim for refund of duty. - (1) Any person claiming refund of any duty or interest,- (a) paid by him; or (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:" 15. The provisions of the Notification dated 14.09.2007 as amended on 01.08.2008 and the aforesaid provisions of the Tariff Act and the Customs Act were examined by the Delhi High Court in Sony India. It was held that since Additional Duty levied under section 3(5) of the Tariff Act is refundable only on a subsequent sale, no limitation can possibly be imposed for filing a refund claim from the date of payment of such Additional Duty. The High Court further observed that neither section 27 of the Customs Act nor the provisions of the amended Notification dated 01.08.2008 can i....
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....t, this 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), CUSAA 3/2014 Page 8 such as the amending notification no. 93/2008-Cus dated 1.08.2008 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 SADC paid owing to having incurred sales tax/VAT liability on subsequent sale of goods, it must be introduced by legislation, given the expropriatory consequences of such a limitation period. 14. The expression "so far as may be" in this context, under Section 27 is significant as well as instructive. The levy under CUSAA 3/2014 section 3 (5) is conditional upon the Central Government's opinion that it is necessary to "counterbalance 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 more than one levy exists, would be the highest of such rat....
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....expressed that whether the normal time-limit of six months prescribed in Section 27 of the Customs Act, would apply. In the absence of specific provision of Section 27 being made applicable in the said notification, the time-limit prescribed in this section would not be automatically applicable to refunds under the notification. Further, it was also represented that the goods imported may have to be dispatched for sale to different parts of the country and that the importer may find it difficult to dispose of the imported goods and complete the requisite documentation within the normal period of six months. Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being made so as to incorporate a specific provision prescribing maximum time-limit of one year from the date of payment of duty, within which the refund could be filed by any person. It is also clarified that the importers would be entitled to refund of duties only in respect of quantities for which the prescribed documents are made available and the claims submit....
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.... Commissioner of Customs, New Delhi (CUSAA 3/2014, decided on 16-4-2014 [2014 (304) E.L.T. 660 (Del.)]) held that the expression "so far as may be" occurring in Section 3(5) of the Customs Tariff Act cannot ipso facto 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. xxxxxxxxx." (emphasis supplied) 18. This is also what was held by a Division Bench of the Tribunal in Radial Rubber Industries. 19. Subsequently, the Delhi High Court also examined this issue in Commissioner of ....
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.... Court in CMS Infosystem Ltd. v. Union of India: 2017 (349) ELT 236 (BOM) has taken a contrary view. 12. This Court has, in a number of matters, dismissed the appeals filed by the Customs Authorities in view of the decision in Sony India Pvt. Ltd. v. Commissioner of Customs (supra). In Commissioner of Customs v. S.R. Traders: CUSAA 36 of 2021, decided on 18.04.2022, a Coordinate Bench of this Court has observed that decision in Sony India Pvt. Ltd. v. Commissioner of Customs (supra) would be binding on other benches of this Court. In CUSAA 69/2019 captioned as Commissioner of Customs v. Tanvir Trading Import, this Court observed that it found no reasons to differ with the aforesaid view and, accordingly, dismissed the appeal. 13. We are of the view that the present appeal is required to meet a similar fate." (emphasis supplied) 20. The Special Leave Petition filed by the department to assail the aforesaid judgment of the Delhi High Court in Bhimeshwari Overseas was dismissed by the Supreme Court in Commissioner of Cusotms (Import), ICD, New Delhi vs. Bhimeshwari Overseas [2023 (385) E.L.T. 807 (S.C.)] and the order is reproduced below: "2. Thi....
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....f the said goods appropriate sales tax or value added tax, as the case may be, is equally a condition and further requirement is providing of copies of documents along with refund claim. Else, no refund is admissible. We are of the opinion that it is not possible to guess as to whether the refund application would be held to be non-maintainable purely on the grounds or for the reasons suggested. If it is made within a period of one year from the date of payment of the additional duty of customs, then, because there is no subsequent sale and the documents evidencing that, as also proof of payment 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." 23. 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....
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....ordance of the aforesaid Section 27 of the Customs Act." 27. As noticed above, the Notification dated 14.09.2007 requires fulfilment of certain conditions. The importer has to pay on the sale of the goods appropriate sales tax or value added tax and has to provide copies of documents with the refund claim evidencing payment of said Additional Duty, invoices of sale of the imported goods in respect of which refund of the said Additional Duty is claimed and documents evidencing payment of appropriate sales tax by the importer on the sale of such imported goods. These conditions were examined by the Delhi High Court in Sony India while arriving at a conclusion that the limitation provided in the Notification dated 01.08.2018 that the refund has to be made within a period of one year from the date of payment of Additional Duty 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 of payment....