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2015 (10) TMI 1099 - DELHI HIGH COURT

2015 (10) TMI 1099 - DELHI HIGH COURT - 2016 (333) E.L.T. 33 (Del.) - Claim of interest of refund of SAD - refund was granted beyond period of three months - Section 27A - refund under Notification No. 102/2007 Revenue contends that refund under Notification No. 102/2007 was not governed by Section 27 thus Section 27 A would also not apply.

Held That:- Notification no.102/2007 under Section 25(1) of the Act exempts goods described in First Schedule of the CTA from whole of additiona .....

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in terms of Section 27A of the Act Decided in favour of the Respondent. - CUSAA No. 20 of 2015 and C.M. Nos. 22554 of 2015 (Stay), 22555 of 2015 (Exemption) & 22556 of 2015 (Delay) - Dated:- 7-10-2015 - Dr S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Satish Kumar, Senior Standing Counsel For the Respondent : None JUDGMENT Dr S Muralidhar, J. CM No.22556/2015 (Delay) 1. For the reasons stated in the application, the delay of 10 days in filing the appeal is condoned. 2. The ap .....

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mmissioner of Customs in this appeal is whether an importer is entitled to interest beyond the period of three months under Section 27A of the Act on refund of Special Additional Duty (SAD) under Notification No. 102/2007 issued under section 25 of the Act in the absence of a specific provision for payment of interest in the said Notification as subsequently clarified in Para 4.3 of the Circular No. 6/2008-Cus dated 28th April, 2008 issued by the Central Board of Excise and Customs (CBEC). 7. Th .....

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was granted. However, the claim of the Respondent for interest on the refunded SAD was rejected by the Assistant Commissioner by an order dated 30th March, 2012. 8. The appeal against the said order was dismissed by the Commissioner of Customs (Appeals) by an order dated 16th October, 2012. It was observed that the Respondent had not specifically claimed interest and sought only refund. Further, it was held that the refund under Notification No. 102/2007 was not governed by Section 27 of the Act .....

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ld that that Section 27 and 27A of the Act would apply to claims for refund under the said Notification. Accordingly, the CESTAT directed the Assistant Commissioner to pay interest to the Respondent on the refunded amount for a period after three months from the date of the application for refund till the date of refund. 10. It is submitted by Mr Satish Kumar, learned Senior Standing Counsel for the Appellant, that the CESTAT erred in placing reliance on a judgment of the Madras High Court which .....

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ion 27 of the Customs Act, 1962 read with certain amending notifications concerning the limitation period within which a refund application had to be made under Notification No. 102/2007. 11. It requires to be noticed that the word duty has been defined under Section 2 (15) of the Act as "a duty of customs leviable under this Act". The levy of additional duty is provided under Section 3 of the CTA. Further Section 3 (8) which incorporates by reference the provisions of the Act, reads t .....

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as provided by Sections 27 and 27 A of the Act would apply to refund of SAD levied under Section 3 of the CTA as well. The relevant portions of Sections 27 and 27A of the Act which are relevant for the purposes of the present case read as under: "27. Claim for refund of duty (1) Any person claiming refund of any duty or interest,- (a) paid by him (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 .....

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of sub-section(2). Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest: (1A) The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty or interest, h .....

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he appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction; (c) Where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment.] (2) If, on receipt of any such application, the [Assistant Commissioner of Customs or Deputy Com .....

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the Fund, be paid to the applicant, if such amount is relatable to- (a) the [duty and interest, if any, paid on such duty], paid by the importer [or the exporter, as the case may be], if he had not passed on the incidence of such 1[duty and interest, if any, paid on such duty] to any other person; (b) the [duty and interest, if any, paid on such duty], on imports made by an individual for his personal use; (c) the [duty and interest, if any, paid on such duty] borne by the buyer, if he had not p .....

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the Central Government the incidence of [duty and interest, if any, paid on such duty] has not been passed on by the persons concerned to any other person. .......... 27A. Interest on delayed refunds If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded with three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below ten per cent and not exceedin .....

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ee months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty." 13. Thus under Section 27(2), the Assistant Commissioner of Customs can make an order, on an application for refund. The various kinds of duty that can be ordered to be refunded under Section 27 (1) have been provided in clauses (a) to (f) of sub-section 2 of Section 27. Under Section 27A if any duty is .....

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f refund of such duty". 14. Notification no.102/2007 under Section 25(1) of the Act exempts goods described in the First Schedule of the CTA from the whole of the additional duty of customs leviable under Section 3 (5) of the CTA. The conditions on which exemption would be granted is specified in the said notification. With the purported object of clearing the confusion regarding the time limit within which a refund can be made in terms of Notification No.102/2007, the CBEC issued Circular .....

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n the normal period of three months. Further, in the absence of specific provision for payment of interest being made applicable under the said notification, the payment of interest does not arise for these claims. However, Board directs that the field formations shall ensure disposal of all such refund claims under the said notification within the normal period not exceeding three months from the date of receipt." 15. The issue that arises as far as the present case is concerned is whether .....

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Notification No. 102/2007 and the CBEC Circular No. 6/2008. 17. As already noticed, the word 'duty' as defined in Section 2 (15) of the Act is wide enough to cover all kinds of customs duty. Section 3(8) of the CTA makes it clear that the provisions of the Act including those relating to drawback, refunds and exemptions shall "so far as may be" apply to the SAD chargeable under the CTA. There can be no doubt, therefore, in relation to the SAD levied under Section 3 of the CTA, .....

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in the notification needed to be read down to the extent that it provided for a limitation period when Section 27 itself did not. After analysing the Notification in light of Section 27 of the Act, and Section 3 (8) of the CTA, this Court observed as under:- "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 authoriti .....

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imposition of penalties and other provisions that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or rules cannot prevail or be made, in such cases. The imposition of a period of limitation for the first time, without statutory amendment, through a notification, therefore could not prevail. 18. For these reasons, this Court holds that the amending notification must be read down to the extent that it imposes a limitation period .....

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