TMI Blog2020 (2) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... year from the date of payment of Additional Duty, has to be read down. The decision of the Delhi High Court in Sony India was binding on the Tribunal but it has been distinguished for a reason that is not borne out from a plain reading of the conditions set out in the notification. Learned Authorized Representative of the Department has also submitted that the judgment of the Delhi High Court in Sony India would not be applicable for the reason that the refund in that case was filed at a time when the amended notification dated 1 August, 2008 had not been issued - This submission cannot be accepted for the simple reason that the Delhi High Court has not allowed the refund claims for the said reason. It has allowed the refund claims as the limitation of one year provided for in the amended notification dated 1 August, 2008 has to be read down in as much as the right to claim refund could accrue to an importer only when the subsequent sale is completed and given the vagaries of the market, the importer has limited control over when the sale would be complete. It is for this reason that the Delhi High Court held that to allow the limitation period to start from the date of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may, by notification in the Official Gazzette, direct that such imported article shall, in addition, be liable to an Additional Duty at a rate not exceeding four per cent of the value of the imported article as specified in that notification. 3. The notification dated 14 September, 2007 issued under section 25(1) of the Customs Act, 1962 [ the Customs Act ] exempts goods falling within the First Schedule of the Tariff Act, when imported into India for subsequent sale from the whole of the Additional Duty of customs leviable under section 3(5) of the Tariff Act. However, the exemption contained in the notification shall be given effect to upon fulfillment of certain conditions laid down in paragraph 2 of the notification. The said notification is reproduced below:- Notification dated 14 September, 2007 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 102/2007-Customs, dated the 14th September, 2007 which was published the Gazette of India, Extraordinary, vide number G.S.R. 598(E), dated the 14th September, 2007,namely, In the said notification, paragraph 2, for sub-paragraph (c), the following shall be substituted, (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 before the expiry of one year from the date of payment of the said additional duty of customs; . 5. The respondent filed a claim for refund of ₹ 3,67,535/- on 28 March, 2016 against payment of Additional Duty that had been paid by the respondent in regard to four Bills of Entry pursuant to the notification dated 14 September, 2007, as amended by notification dated 1 August, 2008. Details of the refund are as follows:- S. No. Bill of Entry No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly followed by the Delhi High Court in Commissioner of Customs (Import), v/s Gulati Sales Corporation [ 2018 (360) ELT 277 (Del) ] 8. Shri Rakesh Kumar, learned Authorized Representative of the Department has submitted that:- (i) The Commissioner committed an error in relying upon the judgment of the Delhi High Court in Sony India in as much as in the said case the goods had been imported prior to the issue of the notification dated 1 August, 2008 which had introduced the limitation of filing a refund claim within one year from the date of payment of the Additional Duty, whereas in the present case the Bills of Entry pertained to a period after 1 August, 2008; (ii) The Special Leave Petition filed by the Department against the judgment of the Delhi High Court in Sony India was dismissed on the ground of limitation but the question of law was kept upon; (iii) The Bombay High Court in CMS Info System Ltd. v/s Union of India, Ministry of Finance and others [ 2017 (349) ELT 236 (Bom.) ] held that the refund claim has to be filed before the expiry of one year from the date of payment of Additional Duty; (iv) The Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther sale on payment of VAT and not from the date of payment of Additional Duty. 10. The submissions advanced by the learned Authorized Representative of the Department and the learned Counsel for the respondent have been considered. 11. The dispute in this Appeal relates to two Bills of Entry, both dated 19 March, 2015, for which Additional Duty to the extent of ₹ 1,58,137/- was paid by the respondent, under the provisions of section 3(5) of the Tariff Act. The respondent had claimed refund of this Additional Duty in view of the notification dated 14 September, 2007 by notificaiton. Under the said notification, exemption has been granted to the goods falling within the First Schedule of the Tariff Act, when imported into India for subsequent sale, from the whole of the Additional Duty leviable thereon under section 3(5) of the Tariff Act, subject to certain conditions. The first condition set out is that the importer shall pay all duties, including the Additional Duty leviable thereon, as applicable, at the time of importation of the goods. The second condition is that the importer, while issuing the invoice for sale of the said goods, shall specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 amended notification dated 1 August, 2008 can impose a limitation period as such limitation can only be introduced by legislation. The High Court also noticed that the expression so far as may be in section 3(8) of the Tariff Act was significant and this would mean that the provisions of Customs Act would be applicable only to the extent possible . Thus, the High Court concluded that the period of limitation contemplated under section 27 of the Customs Act would not be applicable to a refund made under the exemption notification, more particularly when the customs authority also understood that section 27(1) of the Customs Act would not be applicable. The relevant portion of the judgment of the High Court is reproduced below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The expression so far as may be in this context, under Section 27 is significant as well as instructive. The levy under CUSAA 3/2014 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 notification. In this case, the regime existing before the notification of 2008 did not specify any period of limitation - and perhaps advisedly so. Some customs authorities apparently started applying section 27, drawing inspiration from section 3(8) which led to confusion. In Notification No.102/2007-Customs dated 14.09.2007 there was no period of limitation; by Circular No.6/2008-Customs, an amending notification providing for one year period from the date of payment of the additional duty of customs was issued, through Notification No.93/2008-Customs dated 1.8.2008, amending Para 2(c) of the 2007 Notification. The net effect of these was that a one year period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification dated 14 September, 2017 as amended on 1 August, 2018, would not be applicable. The relevant observations are as follows:- 5 . This Court has recently in its judgment Sony India Pvt. Ltd. v. The Commissioner of Customs, New Delhi (CUSAA 3/2014, decided on 16-4-2014 [2014 (304) E.L.T. 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 allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of documents with the refund claim evidencing payment of said Additional Duty, invoices of sale of the imported goods in respect of which refund of the said Additional Duty is claimed and documents evidencing payment of appropriate sales tax by the importer on the sale of such imported goods. These conditions were examined by the Delhi High Court in Sony India while arriving at a conclusion that the limitation provided in the notification dated 1 August, 2018 that the refund has to be made within a period of one year from the date of payment of Additional Duty, has to be read down. The decision of the Delhi High Court in Sony India was binding on the Tribunal but it has been distinguished for a reason that is not borne out from a plain reading of the conditions set out in the notification. 22. Learned Authorized Representative of the Department has also submitted that the judgment of the Delhi High Court in Sony India would not be applicable for the reason that the refund in that case was filed at a time when the amended notification dated 1 August, 2008 had not been issued. 23. This submission cannot be accepted for the simple reason that the Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue 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. 25. It would be seen from the aforesaid paragraphs of the judgment of the Bombay High Court that the contention that an importer has to pay appropriate sales tax or value added tax on the sale and also provide copies of documents with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of a given case before the Tribunal. The Tribunal also indicated that this should be so, irrespective of the fact whether one particular assessee was within the jurisdiction of a specified High Court or the original adjudicating authority was located there. The judgment of the Apex Court in the case of M/s. East India Commercial Co. Ltd. v. Collector of Customs, Calcutta reported in 1983 (13) E.L.T. 1342 (S.C.) was brought to the notice of the Larger Bench, but, was not adverted to sufficiently in the course of discussion. In the East India Commercial Co. case, one of the questions for consideration was whether the interpretation given by the Calcutta High Court to Section 167 of the Sea Customs Act, 1878 would be binding on authorities functioning within the jurisdiction of the High Court and the Supreme Court held that it is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunals subject to its supervision should conform to the law laid down by it. ........We, therefore, hold that the law declared by the highest Court in the State is binding on authorities or Tribunals under its superintendence......... . This decision has been fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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