1. This is an appeal filed against order-in-appeal No. MUN-CUSTM-000-APP-202-17-18 dated 04.10.2017 passed by Commissioner (Appeals) of Customs, Ahmedabad.
2. The appellant had filed refund application for an amount of Rs. 44,98,444/- on 03.8.2016 of 4% SAD paid at the time of import of the goods under Notification No. 102/2007-CUS dated 14.09.2007 during June 2015 to October 2015. A Show Cause Notice was issued to them on 22.09.2016 proposing rejection of the part of the said refund claim amounting Rs. 12,19,989/- alleging barred by limitation of the time limit of one year from the date of payment of duty prescribed under the said Notification. On adjudication, the refund was rejected. Aggrieved by the said order, the appellants filed appeal before the Ld. Commissioner (Appeals) who, in turn, rejected their appeal. Hence the present appeal.
3. Ld. Advocate for the appellants submits that the refund claim was filed under Notification 102/2007-Cus. Dated 14.09.2007, after sale of the imported goods, therefore, the period of limitation prescribed under the said Notification would commence from that date on the date of payment of duty. In support he has referred to the decision of Hon'ble Delhi High Court in the case of Sony India Pvt. Ltd. v. CC, New Delhi : 2014 (304) ELT 660 (Del.).
4. Per contra, Ld. AR for the Revenue, on the other hand submitted that the present refund claim was filed pursuant to the exemption Notification No. 102/2007 of 4% SAD paid at the time of import. It is his contention that the Hon'ble Bombay High Court in the case of CMS Info Systems Ltd. v. UOI : 2017-TIOL-79-HC-Mum-Cus., distinguishing the judgment of the Hon'ble Delhi High Court in Sony India Pvt. Ltd.'s case (supra) observed that the period of one year prescribed under said Notification of 102/2007-Cus. as a condition precedent to avail the exemption is required to be fulfilled to avail the benefit of exemption. Therefore, filing the refund application after one year from the date of import as prescribed under the said Notification is barred by limitation.
5. Heard both the sides and perused the records.
6. The short issue involved in the present case is whether the refund claim of Rs. 12,19,989/- filed pursuant to the exemption Notification 102/2007-Cus dated 14.09.2017, on 03.08.2016 for imports made and duty paid June 2015 to July 2005 is barred by limitation. The Hon'ble Bombay High Court after analyzing the principles and conditions of the Notification 102/2007-Cus dated 14.09.2007 and taking note of the judgment of Delhi High Court in Sony India Pvt. Ltd. (supra) observed as follows.
33. It is submitted that the Hon'ble High Court of Delhi has clearly opined and held that the provisions of the Customs Act on the rules and mechanism for refund are incorporated by reference in Section 3(5) of the CTA only "so far as may be" applicable. Since SADC is levied under Section 3(5) and that is refundable only on subsequent sale, then, no limitation period can possibly be imposed for advancing a refund claim. We have carefully perused the above observations and in the light of the analysis of the statutory provisions and the scheme of refund by us, with greatest respect, we are unable to agree with the High Court of Delhi on this point. The Rules and Regulations under the provisions of the Customs Act 1962, including those relating to drawback, refund and exemption shall so far as may be applied and this reveals that for the purposes of making a application seeking refund, its consideration, that Customs Act and its provisions are made applicable even to the Tariff Act and the duties mentioned thereunder. Therefore, a provision for drawback, refund and exemption from such duties can be made by relying on the Customs Act, 1962. The power to refund is to be found in section 27 of the Customs Act, 1962, and that was always there. The amendment to the notification introducing a limitation for seeking refund apart, section 27 with its condition of a limitation period was throughout on the statute book. That is the only provision enabling granting refund of any duty is undisputed. The notification granting exemption and under consideration in the case, enables claiming a refund of duty (SAD) but the power to grant it is in the substantive law. Precisely, that 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. That the period of one year commences from the payment of the duty. If that is how Section 27 is worded and every duty is included in its ambit and scope, then, an application seeking refund of the same has to abide by it, including the bar of limitation contained therein. That is how consistent with that provision even the special exemption Notification carries the same stipulation or condition. We do not see how insistence on complying with it can be said to be imposing a unreasonable, unfair and unjust restriction. Once the nature of the right is considered, then, all the more we are unable to agree with Mr. Patil. There is no vested, much less absolute right in the petitioners to seek refund. Even a refund must be within the framework of the statute and admissible on the terms thereof. We are not inclined to agree with him that compliance with this period is calling upon the petitioner to do or perform something which is impossible. The exemption Notification does not impose any new condition as has been read into it. It grants the exemption from payment of duty conditionally. The exemption can be availed of provided the goods which are imported are subject to payment of duties which include all the duties that are referred to in both the enactment and the notification. If the import is for subsequent sale, then, that invoice must carry a stipulation that no credit for the additional duty of customs shall be admissible. The importer thereafter can file a claim for refund of the additional duty of customs paid on the imported goods before the expiry of one year from the date of payment of additional duty of customs.
34. Mr. Patil would submit that the importer shall pay on sale of the said goods appropriate sales tax or value 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. 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 and therefore ultra vires Article 14 of the Constitution.
35. We are of the view that it is entirely for the Central Government to take a decision with regard to exemption, the conditions to be imposed therein and whether those conditions ought to be fulfilled within a time limit. These are matters best left to the Central Government. The Central Gov
Please Login To View The Full Judgment!
ernment having exercised the powers in terms of the statutory provisions, then, that must govern the whole field. Just as exemption flows from the power to exempt, equally the refund flows from the power to grant such refund and makes it admissible. Both powers flow from the statute, namely, the Customs Act, 1962. It is that statute and the other one which envisages levy, imposition and recovery of customs duties. It is that statute which grants an exemption therefrom but on conditions. Once the statutory scheme is understood in the proper perspective and as a whole, then, merely because the view taken by the Delhi High Court has not been interfered by the Hon'ble Supreme Court will not enable us to follow it. There, the discussion, with greatest respect, is short of all the above noticed provisions. 7. In view of the principles laid down by the Hon'ble Bombay High Court in the aforesaid case, which is squarely applicable to the facts of the present case, the impugned order is upheld and the appeal being devoid of merit is dismissed.