TaxTMI 
TaxTMI 
2024 (10) TMI 1358
X X X X Extracts X X X X
X X X X Extracts X X X X
....e claim of the appellant only on this ground that the period of one year from the date of the payment of the SAD have not been followed by the appellant and therefore the refunds of the SAD paid at the time on the importation has been rejected at the ground of the limitation. 2. Learned Advocate appearing for the appellant has submitted that the Hon'ble Delhi High Court in case of Sony India has held that the period of limitation of one year will start from the date of the sale of the goods in the open market when the VAT is paid on the sale of such goods. 2.1 The Learned Advocate has claimed that the appellant has paid the appropriate Sales Tax/VAT on the imported goods at its time of subsequent sale of the same in the open market. It has also been mentioned that all the refund claims provides sale invoices with the corresponding Bills of Entry number for the co-relation, It has been emphasizes that imported goods on which SAD was pad were sold in the open market on payment of appropriate Sales Tax/VAT and as per the provisions of the Notification No. 102/2007- Cus. dated 01.04.2007, the appellants are entitled for refund of SAD which was paid by them at the time of importat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble under that Act." 16. 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" 17. 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 impose a limitation period and such limitation can o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....applicable to the duties levied under Section3(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 CUSAA3/2014 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 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 notifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 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 submitted within the maximum prescribed time of one year. Unsoid stocks would not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2014[2014(304) E.LT. 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) 20. This is also what was held by a Division Bench of the Tribunal in Radial Rubber Industries. The contention of the department that the decision of the Delhi High Court in Sony India would not be applicable to matters after the notification ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 23. Subsequently, the Delhi High Court also examined this issue in Bhimeshwari Overseas. After following the earlier decision of the Delhi High Court in Sony India, the High Court dismissed the appeal filed by the department the relevant portions of the judgment are reproduced below: "6. The principal issue involved in the present appeal relates to the applicability of time period to claim refund of the Special Additional Duty of Customs (SAD) on goods Imported in terms of the Notification No. 102/2007- CUS. 7. Aggrieved by the rejection of refund claimed by the Adjudicating Authority, the respondent preferred an appeal before the Commissioner of Customs (Appeals), New Delhi. The learned Commissioner of Customs (Appeals), relying upon the judgment passed by this Court in Sony India Pvt. Ltd. v. Commissioner of Customs: 2014 (304) ELT 660, allowed the appeal filed by the respondent by order dated 24.10.2017. The appeal filed by the appellant challenging the order dated 24.10.2017 was dismissed by the learned CESTAT by its order dated 21.02.2018 (Impugned order). 8. The impugned order indicates that the learned CESTAT had followed its earlier dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uced below: "2. This Court is of the opinion that the impugned order does not call for interference. The spec leave petition is accordingly dismissed. 3. Pending application(s), if any, also stand disposed of." 25. The Delhi High Cound to examined this issue in Commissioner of Customs, New Deals, Input 7 Nanak Electronics Pvt. Ltd. [2023 (1)TMI 1315- Delhi High Court) and an order similar to the order passed by the Delhi High Court in Bhimeshwari Overseas was passed and the appeler war to the order passed High Court. The Special Leave Petition filed by the department before the Supreme Court was damissed. This decision is reported in Commissioner of Customs, New Delhi, Import vs. Narak Electronics Pvt. Ltd. [2023 (7) TMI 1319- SC Order). The relevant portion is reproduced below: "Delay condoned. In view of the order dated 04.07.2023 passed by this Court in SLP (C) Dy. No. 23340/2023 which has not been interfered with the order impugned therein. The special leave petition, accordingly. stands dismissed. Pending application(s),If any, shall stand disposed of." 26. The Delhi High Court again examined this issue in Premier Timber an....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Chennai)]. Appellants contention that the order of jurisdictional High Court is binding on the Department and the order of another High Court cannot be relied upon is not relevant as the facts and circumstances under which the order of Sony India or Pee Gee International were delivered were entirely different. The case of Sony India is for the period prior to amendment of notification 102/2007-Cus. Thus this judgment cannot be applied to present case." 6. In our view, the reasoning fumished by the Commissioner of Customs (Appeals) via order dated 11.05.2020 is flawed, as limitation cannot be prescribed by a notification. 6.1 This aspect of the matter was dealt by this Court in Sony India Pvt. Ltd. case 7. We respectfully agree with the view taken in Sony India Pvt. Ltd. and therefore, allow the instant appeal. (emphasis supplied) 27. In Commissioner of Customs (Import) vs. Gulati Sales Corporation (2018 (360) ELT., 277 (Del.), the Delhi High Court reiterated the view expressed earlier in Sony India and the relevant portion of the Judgment is reproduced below: "3. In our opinion, the issue is covered by the decision of the Delh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er evidence with regard to payment of appropriate sales tax or value added tax is produced. The documents and papers have to be produced before the customs authorities, checked and verified, before refund is issued. It goes without saying that the intent is that no double duty/tax-first, the form of SAD and secondly, in form of sales tax or value added tax, is to be paid. 10. Circular dated 28th April, 2008 quoted above specifically states the view and 78 understanding of the Revenue that Section 27 of the Act is not made applicable to the Notification No. 102/2007 and the time limit prescribed under the said Section would not be applicable. The Revenue notwithstanding the said understanding and their Circular, now seeks to contend and urge to the contrary. 11. In view of the aforesaid, we find that the impugned order being in consonance with the ratio in the case of Sony India (supra), no case for interference is made out. No substantial question of law. therefore arises. The appeal is dismissed, without any order as to costs. (emphasis supplied) 28. It is however pointed out that Special Leave to Appeal (Civil) No. 4820 of 2018 filed by the dep....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 34. Mr. Patil would submit that the importer shall pay on sale of 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." (emphasis supplied) 31. It would be seen from the aforesaid paragraphs of the judgment of the Bombay High Court that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ine in each case whether the said conditions have been fulfilled. Thus, the limitation of one year period from the date of payment of additional duty contemplated in the amending notification dated 01.08.2008 cannot be examined dehors the conditions stipulated in the notification dated 14.09.2007. 34. The Bombay High Court in CMS Info System did not consider it necessary to examine the conditions set out in the notification dated 14.09.2007 for the reason that the application for refund had been rejected only on the ground that it had been filed beyond the period of one year and not for non satisfaction of the conditions set out in the said notification dated 14.09.2007. 35. In view of the above aforesaid discussion, it would be appropriate to follow the view taken by the Delhi High Court in Sony India. 36. In any view of the matter, the issue as to which judgment of the High courls should be followed if conflicting view have been takne was decided by a Larger Bench (a five Member Bench) of the Tribunal in Colloector of Central Excise, Chanddigarh Vs. Kashmir Conductors (1997 (96) ELT 257 (Tro/ ) one issue that was addressed by the Larger Bench was what s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(12) TMI 1487 CESTAT NEW DELHI decided on 25.10.2018); and (iv) C.C. Hyderabad- Customs vs. Surya Telecom Pvt. Ltd [2018 (7) TMI 192-CESTAT HYDERABAD]. 41. In Khazana, a leamed member of the Tribunal did not follow the decision of the Delhi High Court in Sony India only for the reason that it dealt with a situation that existed prior to the issue of the notification dated 01.08.2008 that introduced the limit of one year. In Hariyana International, the Division Bench of the Tribunal did not consider the judgment of the Delhi High Court in Sony India. In Nav Bharat Trading Corporation, the Division Bench of the Tribunal relied upon section 27 of the Customs Act, which section was held to be inapplicable by the jurisdictional Delhi High Court in Sony India. In Surya Telecom, the decision of the Bombay High Court in CMS Infosys System was relied upon. 42. These four decisions of the Tribunal have distinguished the judgment of the Delhi High Court in Sony India for reasons which are not tenable. The decision of the Delhi High Court in Sony India had also taken into consideration the amended notification dated 01.08.2008 43. The decisions of the Tribun....