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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. MAHADEVAN, J. SATHYA NARAYANA PRASAD, JJ.
The Commissioner of Customs, Chennai - Appellant
Versus
CMS Info Systems Limited, Chennai - Respondent
C.M.A. No. 384 of 2019
Decided On : 08-06-2022
Customs Act - Refund of Special Additional Duty - Section 3(5) of the Customs Tariff Act, 1975, Section 25(1) of the Customs Act, 1962, Notification No.102/2007-Cus - The court discussed the grant of interest on the belated refund of Special Additional Duty (SAD) and the limitation period for claiming the refund. It referred to decisions of the Delhi High Court and the Supreme Court to determine the applicability of Section 27A of the Customs Act. The court set aside the orders-in-appeals and remanded the matter for fresh consideration based on the outcome of a pending Supreme Court decision.
Fact of the Case:
The respondent filed a claim application for refund of 4% additional duty of Customs, which was initially rejected for non-submission of documents and on limitation grounds. On appeal, the appellate authority set aside the rejection and directed the adjudicating authority to pass fresh orders. The adjudicating authority sanctioned the refund for all Bills of Entry except two, citing limitation. The appellate authority allowed the appeal and directed the adjudicating authority to process the claim for refund and pay interest on delayed refund. The revenue appealed to the CESTAT, which affirmed the order of the appellate authority.
Finding of the Court:
The court set aside the orders-in-appeals and remanded the matter to the Adjudicating Authority for fresh consideration of the application for refund in respect of two Bills of Entry, based on the outcome of a pending Supreme Court decision.
Issues: The grant of interest on the belated refund of Special Additional Duty (SAD) and the limitation period for claiming the refund.
Ratio Decidendi: The court considered the applicability of Section 27A of the Customs Act and referred to decisions of the Delhi High Court and the Supreme Court to determine the legal provisions governing the grant of interest on the delayed refund and the limitation period for claiming the refund.
Final Decision: The Civil Miscellaneous Appeal is disposed of by setting aside the orders-in-appeals and remanding the matter to the Adjudicating Authority for fresh consideration based on the outcome of a pending Supreme Court decision.
JUDGMENT
(Prayer: Civil Miscellaneous Appeal filed under Section 130 of Customs Act, 1962 against the Final Order No. 41410/2017 in Appeal No.C/40164/2017-SM dated 25.07.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai.)
R. Mahadevan, J.
1. This Civil Miscellaneous Appeal is filed questioning the correctness of the Final Order dated 25.07.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT).
2. Originally, the respondent / assessee had filed a claim application for refund of 4% additional duty of Customs levied under Section 3 (5) of the Customs Tariff Act, 1975. The claim was originally rejected by an Order-in- Original dated 17.11.2015 for non-submission of required documents and on limitation ground. On appeal, the appellate authority, by an order-in-appeal dated 06.04.2016, set aside the order-in-original dated 17.11.2015 and directed the adjudicating authority to pass orders afresh, after affording an opportunity of hearing to the respondent/assessee. Pursuant to the order of remand, the adjudicating authority took up the refund application and passed an order-in-original dated 14.07.2016, sanctioning refund of Rs.25,57,262/- in respect of all the Bills of Entry, except two Bills of Entry dated 05.11.2013 and 29.10.2013 on the ground of limitation. According to the Adjudicating Authority, the additional duty was paid on 05.11.2013 and 30.10.2013 respectively, but the application seeking refund was submitted on 14.11.2014 (i.e), after the expiry of one year from the date of payment of duty.
3. Aggrieved against the partial rejection of the claim for refund, the respondent / assessee filed an appeal in C.Cus.II No.914 of 2016 before the Appellate Authority viz., Commissioner of Customs (Appeals-II), Chennai, who placed reliance on the Delhi High Court in M/s. Sony India Pvt Ltd. v Commissioner of Customs, New Delhi [2014 (304) ELT 660 (Delhi)], against which, SLP was filed and the same was subsequently dismissed by the Hon'ble Supreme Court by the decision reported in 2016 (337) ELT 102 (SC), and held that the claim was within limitation of one year from the date of sale, when the right to claim the refund was actually crystallized in terms of Notification No.102/2007-Cus and accordingly, set aside the order-in-original relating to refund claim. As regards the grant of interest on Special Additional Duty (SAD) refund beyond a period of three months from the date of filing, the Appellate Authority, following the order of the Delhi High Court in Principal Commissioner of Customs v. M/s.Riso India P. Limited [2016 (333) RLT 33 (Delhi)], held that the assessee was entitled to get the interest and for computing the period of interest, the ruling of the Hon'ble Supreme Court in M/s.Ranbaxy Laboratories Limited v. UOI [2011 (273) ELT (3)(SC)], has to be kept in mind. Accordingly, by order dated 14.10.2016, the Appellate Authority allowed the appeal filed by the respondent / assessee and directed the adjudicating authority to process the claim in respect of two Bills of Entry and pay interest on the delayed refund in terms of section 27A of the Customs Act.
4. Challenging the order-in-appeal dated 14.10.2016 of the Appellate Authority, the appellant / revenue filed an appeal before the CESTAT. Before the Tribunal, on behalf of the revenue, it was contended that the grant of interest on the belated refund of SAD is illegal. After hearing both sides, the Tribunal rejected the appeal, inasmuch as the said issue is covered by the decision of the Delhi High Court in M/s.Riso India Limited case and there being no contrary decision of any other High Court. Aggrieved over the same, the appellant / revenue is before this court with this appeal.
5. Heard the learned senior panel counsel appearing for the appellant / Revenue and also perused the materials available on record, including case laws. Despite the service of notice and the name of the respondent / assessee having been
The central legal point established in the judgment is the determination of the applicability of Section 27A of the Customs Act, the grant of interest on the belated refund of Special Additional Duty....
The limitation period for refund claims under the Customs Act is determined from the date of final assessment, not the date of provisional duty payment.
The time limit for filing a refund claim under Notification No. 102/2007 is computed from the date of final assessment, not from the date of payment of duty.
Since the provisions of section 11B of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and th....
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