Cus – Refund of SAD - In view of express provisions of s.27 of CA, 1962, time period provided in amending notfn. 93/2008-Cuswill apply with all force: HC
By TIOL News Service
MUMBAI, NOV 08, 2017: THIS is a Revenue appeal before the Bombay High Court against the order of CESTAT dated 23.02.2015 - 2015-TIOL-1051-CESTAT-MUM.
The respondent is an importer and manufacturer of bulk drugs.
The importer was required to deposit Special Additional Duty (SAD) in lieu of Sales Tax at the time of import. Vide Notification No. 102/2007-Cus dated 14.9.2007, the Central Government had provided for exemption of SAD on all goods when imported for subsequent sale subject to certain terms and conditions. However, the notification was amended by notification 93/2008-Cus and whereby the time limit for refund of SAD was provided, being before expiry of one year from the date of payment of SAD.
The refund claim of the appellant was rejected by the Assistant Commissioner of Customs vide Order-in-Original dated 08.03.2013 on the ground that the duty paid challans are dated 27.09.2010 and 18.08.2011 whereas the refund application has been filed beyond a period of one year from the said date, on 11.02.2013. The Commissioner(A) upheld the rejection.
The CESTAT had, however, allowed the appeal of the importer by holding thus –
| Cus - Notification 102/2007-Cus - Refund of SAD - There is no limitation for refund of SAD prescribed under section 27 of the Customs Act, 1962 - Limitation period cannot be started before the claim has crystallised - appellant entitled to refund of SAD - appeal allowed - Adjudicating authority to grant refund with interest within period of six weeks: CESTAT [para 5] |
While allowing the appeal, the Bench had followed the Delhi High Court decision in Sony India Pvt. Ltd. - 2014-TIOL-532-HC-DEL-CUS .
As mentioned, Revenue is in appeal against the order of CESTAT.
Following substantial questions of law were framed -
(i) Whether the decision of the Delhi High Court in the case of Sony India Pvt. Ltd. vs. Commissioner of Customs, New Delhi = 2014-TIOL-532-HC-DEL-CUS can be said to be binding precedent in the light of the judgment and order dated 19th December, 2016 passed by the Division Bench of this Court in Writ Petition no.338 of 2016 M/s. CMS Info Systems Limited vs. Union of India and Ors = 2017-TIOL-79-HC-MUM-CUS .?
(ii) Whether the impugned judgments of the Appellate Tribunal are perverse as the Appellate Tribunal ignored that the demands subject matter of the Appeals were from the year 2010 onwards?
The counsel for the Revenue submitted that what binds the Bombay High Court is not the decision of the Delhi High Court in the case of Sony India Pvt. Ltd., but the decision of the Division Bench in the case of CMS Info Systems Limited = 2017-TIOL-79-HC-MUM-CUS .
The respondent submitted that the decision of the Delhi High Court (supra) had attained finality as a Special Leave Petition preferred against the said judgment had been dismissed by the Apex Court and, therefore, no fault can be found with the impugned order of the CESTAT.
To the aforesaid submission of the respondent, the High Court observed that the apex Court had dismissed the Special Leave Petition filed by the Revenue on the ground of limitation and the question of law was kept open; that it is well settled that doctrine of merger is not applicable when a Special Leave Petition against a decision of a High Court is summarily dismissed without recording reasons .
The High Court further observed –
+ In the case of Sony India Pvt. Ltd., the Delhi High Court was dealing with an appeal challenging an order refusing to grant refund.
++ The question was in respect of the goods imported prior to the issue of the amended notification dated 1st August, 2008. The question was whether the period of limitation provided by the amended notification (93/2008-Cus) will apply to the goods imported. While answering the said question of law, the Delhi High Court laid down that the amended notification must be read down to the extent that it imposes a limitation period.
+ In the case of CMS Info Systems Limited, the Division Bench of this Court dealt with a Writ Petition wherein the challenge was to the stipulation of limitation prescribed in the notification dated 1st August, 2008… The Division Bench dealt with the issue of legality of the amended notification dated 1st August, 2008 . Ultimately, the Division Bench proceeded to negative the challenge to the limitation imposed by the amended notification. The Division Bench held that the power to grant exemption and refund is conferred on the Central Government and the Government has power to provide for a period or time limit for making an application for refund. Therefore, the Division Bench proceeded to hold that in view of express provisions of Section 27 of the Customs Act, the time period provided in the amended notification will apply with all the force.
Concluding that what binds the Bombay High Court is the law laid down by a Coordinate Bench in the case of CMS Info Systems Limited , the order of the CESTAT placing reliance on the case of Sony India Pvt. Ltd. was quashed and set aside.
The Revenue appeal was allowed.
(See 2017-TIOL-2334-HC-MUM-CUS)
