TaxTMI 
TaxTMI 
2026 (6) TMI 1504
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....oods, thus deviating from the condition of the Notification in respect of limitation of one year from the date of payment of customs duty? (ii) Whether Hon'ble Tribunal was correct in observing that decision of Hon'ble High Court of Delhi in the case of Sony India Pvt. Ltd. will prevail over the judgment of Hon'ble High Court of Mumbai in case of CMS Info System, though the Constitutional Bench of the Hon'ble Apex Court in judgment dated 30.07.2018 in the case of Dilip Kumar & Company held that the exemption notification should be interpreted strictly?" 4. The brief facts of the case are as under: 4.1 The assessee has filed refund claim of Rs.71,22,016/- on 1.1.2016 in respect of 4% (Special Additional Duty (SAD) paid by it on import. On scrutiny of the documents, it was found by the department that bills of entry against which the claim was made, appeared as time barred as per provision of Section 27 of the Act. 4.2 By letter dated 21.1.2016, it was informed to the assessee that the refund claim is time barred, however, such rejection was opposed by the assessee and the case was adjudicated by passing the Order-in-Original dated 10.5.2016 and refu....
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....from the date of payment of duty shall not apply, whereas 1 year shall apply from the date of sale of the goods. The judgment of Delhi High Court has been upheld by the Hon'ble Supreme Court. It is further observed that the Hon'ble Supreme Court has upheld the judgment in the case of M/s. Bhimeshwari Overseas and Nanak Electronics Pvt Ltd passed by the Hon'ble Delhi High Court. Therefore, the view taken by the Delhi High Court was affirmed by the Hon'ble Supreme Court in the various judgments cited (supra). As regard the reliance placed by the revenue in the case of CMS Info System. Ltd, we find that with due respect though the Hon'ble Bombay High Court expressed the view that one year limitation shall apply from the date of payment of custom duty, however in the light of the consistent view taken by the Delhi High Court and upholding the same by the Hon'ble Supreme Court the judgment of Delhi High Court will prevail." 7. Learned Senior Standing Counsel Mr. Deepak Khanchandani submitted that it is true that the Hon'ble Delhi High Court has struck down the time limit of one year prescribed by the Notification No. 93/2008 dated 01.08.2008 and the Hon'ble Su....
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....is duty, while enacted into force in a legislation that sought to consolidate the "law relating to customs duties", is a duty in the nature of sales/VAT. The intent of such duties seeking to counterbalance the sales/VAT etc. leviable on like goods sold in India is to counter balance the duties borne by like goods produced indigenously in India, as its Statement of Objects and Reasons would indicate. The exemption provided in the original notification issued in exercise of the power under Section 25(1) of the Customs Act is conditional upon subsequent sale, as can be seen from the conditions required to be fulfilled in order for an importer to avail the benefit of this exemption: "(a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods; (b) 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 of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible; (c) the....
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....rter has limited control over when the sale is complete. To uphold a limitation period starting 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, 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), 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. 13. Customs duties, properly so charged, are those which every importer knows to be leviable on the importation of goods, of course subject to any exemp....
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....in an earlier statute, means that the provisions of the referred (earlier) statue are to be followed "to the extent possible". The Supreme Court, in that case turned down the argument that the letter and content of Section 165 of the Code of Criminal Procedure was to be followed in Foreign Exchange Regulation Act proceedings, by virtue of Section 37 (2) of that Act. It was held, crucially that: "The submission that Section 165(1) has been incorporated by pen and ink in Section 37(2) has to be negatived in view of the positive language employed in the section that the provisions relating to searches shall so far as may be apply to searches under Section 37(1). If Section 165(1) was to be incorporated by pen and ink as Sub-section (2) of Section 37, the legislative draftsmanship will leave no room for doubt by providing that the provisions of the CrPC relating to searches shall apply to the searches directed or ordered under Section 37(1) except that the power will be exercised by the Director of Enforcement or other officer exercising his power and he will be substituted in place of the Magistrate. The provisions of Subsection (2) of Section 37 has not been cast in any such....
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....t of quantities for which the prescribed documents are made available and the claims submitted within the maximum prescribed time of one year. Unsold stocks would not be eligible for refunds." Notification No 93/2008 dated 01.8.2008 was issued prescribing the period of limitation as one year from the date of payment of additional duty of Customs. 17. Plainly, therefore, Section 27 was understood as not applying to SAD 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 01.08.2008 (by notification) became applicable. There is a body of law that essential legislative policy aspects (period of limitation being one such aspect) cannot be formulated or prescribed by subordinate legislation. Khemka and Co. (Agencies) Private Ltd. v. State of Maharashtra, (1975) 35 STC 571 and other decisions are authority on the question that in matters which deal with substantive rights, such as imposition of penalties and other provisions that adversely affect statutory rights, the parent en....
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....hat is the case herein. Further, we find that there is an exemption granted and which is conditional. The exemption being conditional, it is not permissible to pick and choose convenient conditions of the exemption notification and leave out those which to parties like the petitioners, appear to be onerous and excessive. We do not see how in the teeth of a clear provision in the exemption notification can the assessee/petitioners before us contend that the exemption notification is valid for everything else but when it comes to period of limitation therein, that is excessive or unfair, unjust and arbitrary. Once the exemption is conditional, then, all the conditions therein have to be complied with. If that provides for refund, but the application in that behalf is to be made within a specified 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. T....
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....ction 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. In such circumstances and when that stipulation is challenged, all that we can hold is that we are unable to agree, with greatest respect, with the view taken by the Hon'ble High Court of Delhi. With greatest respect, if the exemption can only be claimed within the statutory provisions and not beyond the same, such conditional exemption including the stipulation as above has not been challenged. Only one condition therein cannot be declared ultra vires because the petitioners desire to brush it aside. The petitioners have accepted the position that if this exemption notification had not been issued in exercise of the statutory power, no exemption could have been claimed at all. In these circumstances, merely because a condition is imposed to file a refund application and which is in the nature of a time-bar or limitation, that cannot be held to be onerous, excessive an....
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....pecial Additional Customs Duty under the Customs Tariff Act, 1975 are in nature of sales-tax/ VAT to counter-balance the same. Such duty was imposed to offset any advantage that importers might secure by way of a non-discriminatory levy, by import of goods at cost or prices lower than what would be obtained by domestic manufacturers. As per Section 3(5) read with Section 3(8) of the Custom Tariffs Act, 1975, the provision of the Act and the Rules and Regulation made thereunder including those relating to drawbacks, refunds and exemption from duties would be applicable to duty leviable under the Customs Tariff Act, 1975. 14. Accordingly, the Hon'ble Delhi High Court has held that by way of a notification, limitation period could not have been formulated or prescribed being a subordinate legislation as Section 27 of the Act does not prescribe any limitation. As against that the Hon'ble Bombay High Court in case of CMS Info Systems Ltd. (supra) is of the opinion that it is entirely for the Central Government to take a decision with regard to exemption conditions to be imposed therein which includes the condition of providing the limitation to the refund claim to be made by the asse....
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.... goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods; (b) 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 of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible: (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, (d) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be (e) the importer shall, inter alla, provide copies of the following documents alongwith the refund claim: (i) document evidencing payment of the said additional duty, (ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed, (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported....