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2020 (11) TMI 15 - CESTAT CHENNAIRefund of SAD - N/N. 102/2007-Cus. dated 14.09.2007 - Violation of notification condition - rejection on the ground that the imported ‘oats’ have been re-packed, fumigated and affixed with brand name and not sold “as such” - rejection on the ground of time limitation - levy of penalty u/s 114AA of the Customs Act, 1962 - HELD THAT:- It can be seen from the above Notification that there is no condition that the goods imported have to be sold as such. The word used is “subsequent”. Thus, when an assessee pays VAT on the subsequent sale of imported goods, he may file an application for refund of the SAD paid at the time of import - In the present case, the appellant has done the processes of re-packing, fumigation, affixation of brand name, etc. The Department has denied refund alleging that such processes amount to manufacture and that the goods have not been sold as such. The Hon’ble High Court of Gujarat in the case of AGARWALLA TIMBERS (P) LTD., MITTAL TIMBERS PRODUCTS (P) LTD., VARIETY LUMBERS (P) LTD. AND ASHIRWAD IMPEX (P) LTD. VERSUS CC [2013 (11) TMI 1013 - GUJARAT HIGH COURT] had held that the assessee was eligible for refund of SAD paid on imported timber logs even if the logs were cut to size for subsequent sale. The appeal filed by the Department against the said decision of the Hon’ble Gujarat High Court was dismissed on merits, affirming the view taken by the Hon’ble High Court, in COMMISSIONER OF CUSTOMS VERSUS VARIETY LUMBERS PVT. LTD. [2018 (6) TMI 1499 - SUPREME COURT] - Thus, the rejection of refund claim alleging that the goods were not sold “as such” is unsustainable in law. Time Limitation - ground for rejection of refund is that the refund claims were filed beyond one year from the date of payment of SAD and therefore, are barred by limitation - HELD THAT:- Sub-clause (c) of the Notification, as reproduced in paragraph 6.1 of this order, would show that the refund claim has to be filed before the expiry of one year from the date of payment of additional duty of Customs - The issue of time limit for filing refund claim was subject matter of litigation before the Hon’ble High court of Delhi in the case of SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [2014 (4) TMI 870 - DELHI HIGH COURT] The Hon’ble High Court in the said judgement held that the time period prescribed in the Notification has to be read down. The SLP filed by the Department before the Hon’ble Apex Court in COMMISSIONER VERSUS SONY INDIA PVT. LTD. [2016 (11) TMI 500 - SC ORDER], against such judgement was dismissed on the ground of limitation, leaving the question of law open. Thus, refund claim under Notification No. 102/2007-Cus. cannot be rejected as time-barred even if it is filed beyond the period of one year from the date of payment of additional duty - the rejection of refund on the ground of limitation cannot be sustained. Penalty u/s 114AA of the Customs Act, 1962 - HELD THAT:- We do not understand the logic of imposing penalty in an application for refund. This apart, it has been pointed out by the Learned Counsel for the appellant that there is no proposal in the Show Cause Notice to impose penalty. The imposition of penalty is without any ground and is, therefore, fully set aside. The impugned order rejecting the refund claims is set aside - Appeal allowed - decided in favor of appellant.
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