The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore Bench, has held that an importer cannot claim a refund of Special Additional Duty (SAD) after the prescribed one-year period from the date of payment of duty.
The Tribunal held that the limitation period introduced through Notification No. 93/2008-Customs dated August 1, 2008, applies to imports made after the amendment came into force.
It accordingly set aside an order granting an importer of almonds a refund of ₹19.11 lakh.
Technical Member R. Bhagya Devi was hearing an appeal filed by the Commissioner of Customs against M/s Gajanan Worldtrade India Pvt. Ltd., challenging the order dated August 9, 2018, passed by the Commissioner of Customs (Appeals), Bangalore.
The dispute arose after the importer filed a refund claim of ₹19,11,229 on January 1, 2018, seeking a refund of 4% additional customs duty paid on imported almonds in shells under three Bills of Entry.
The original adjudicating authority rejected the claim on the ground that it had been filed beyond the prescribed period of one year from the date of payment of duty under Notification No. 102/2007-Customs, as amended by Notification No. 93/2008-Customs.
However, the Commissioner (Appeals) allowed the importer's appeal, holding that the limitation period could not begin before the right to claim a refund had crystallised.
The appellate authority also noted that the importer had submitted the required documents and established that the incidence of duty had not been passed on to another person.
Aggrieved by the order, the Revenue approached the Tribunal, arguing that the amendment introduced through Notification No. 93/2008-Customs expressly prescribed a one-year limitation period from the date of payment of SAD.
The Department submitted that the refund claim ought to have been filed on or before November 22, 2017, whereas the importer filed it only on January 1, 2018.
The importer, on the other hand, contended that the refund claim had been filed within five months of the last domestic sale on August 8, 2017, and relied on judicial precedents holding that limitation could not commence before the right to refund arose.
The Tribunal examined Notification No. 102/2007-Customs dated September 14, 2007, which provided for exemption by way of refund of additional customs duty on imported goods subsequently sold in India, subject to prescribed conditions.
It observed that Notification No. 93/2008-Customs, effective from August 1, 2008, amended the earlier notification by introducing a specific requirement that refund claims be filed within one year from the date of payment of additional customs duty.
The Tribunal noted that the importer had filed the relevant Bills of Entry on October 25, October 26 and November 21, 2016, and paid additional customs duty on October 27 and November 23, 2016. However, the refund claim was filed only on January 1, 2018.
Accordingly, it held that the claim had been filed beyond the prescribed limitation period.
The Tribunal also examined the Delhi High Court's decision in Sony India Pvt. Ltd. v. Commissioner of Customs, which had been relied upon to support the refund claim.
It distinguished the decision, observing that the Delhi High Court had considered whether the limitation period introduced through Notification No. 93/2008-Customs could be applied retrospectively to imports made before the amendment.
The Tribunal held that the present dispute concerned imports made in 2016, well after the introduction of the one-year limitation period, and therefore the amended notification was applicable.
"...the Writ Petition was dismissed, Therefore, from 01.08.2008 onwards when the time limit was introduced, the appellant had to necessarily to comply with the conditions laid down in the Notification and had to file the refund claims within one year from the payment of additional duty of customs", it said.
It further relied on the Bombay High Court's decision in CMS Info Systems Ltd. v. Union of India, which held that the conditions prescribed under an exemption notification, including the limitation period for claiming a refund, must be complied with.
The Tribunal also referred to the decisions in Ingram Micro India Ltd. and Honda Siel Power Products Ltd., which emphasised that exemption notifications must be strictly interpreted and that refund claims filed beyond the prescribed limitation period could not be entertained.
The Tribunal concluded that the original adjudicating authority had correctly rejected the refund claim as time-barred and that the Commissioner (Appeals) had erred in allowing it.
Accordingly, the Tribunal set aside the appellate order and allowed the Revenue's appeal, thereby restoring the rejection of the ₹19.11 lakh refund claim.
For Appellant: Vikalp Jain, Superintendent (Authorised Representative)
For Respondent: Advocate Avinash Shanbhogue