Delhi High Court
Commissioner Of Customs Icd - Tkd vs Thermoking on 18 August, 2022
$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 18.08.2022
+ CUSAA 106/2022
COMMISSIONER OF CUSTOMS ICD - TKD ..... Appellant
Through: Mr Vaibhav Joshi, Adv.
versus
THERMOKING ..... Respondent
Through: Mr R V Prabhat with Mr Vinay
Yadav, Mr Rishav Dubey and Mr
Pragyesh Pratap Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
[Physical Court hearing/ Hybrid hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
1. Issue notice.
1.1. Mr R. V. Prabhat accepts notice on behalf of the respondent.
2. In view of the fact that the issue obtaining in the present appeal is
similar to the issue raised in CUSAA no.54/2021, titled: Premier Timber
and Trading Pvt. Ltd. vs. Pr. Commissioner Customs Import, which has
been disposed of via judgment dated 14.07.2022, with the consent of the
counsel for the parties, this appeal is be taken up for disposal at this stage
itself.
3. This appeal is directed against the order dated 24.11.2021 passed by
the Customs, Excise & Service Tax Appellate Tribunal [in short,
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'Tribunal'].
4. As is evident, in the aforementioned judgment i.e. CUSAA 54/2021,
the assessee was in appeal whereas in the instant case, the revenue has
preferred the appeal.
4.1. The issue which arises in the instant appeal, as in the Premier Timber
case, concerns the application of limitation vis-à-vis refund sought qua
Special Additional Duty of customs, levied under section 3 (5) of the
Customs Tariff Act, 1975.
4.2. In the Premier Timber case, we had examined the judgements rendered
by coordinate benches of this Court in Sony India Pvt. Ltd. v.
Commissioner of Customs, New Delhi, 2014 (304) ELT 660 (Del) and
judgement dated 21.09.2016 rendered in CUSAA No.25/2016, titled
Commissioner of Customs (Import) v. Wilhem Textiles India Pvt. Ltd.
4.3. After examining the said judgements, we had agreed with the reasoning
and conclusions arrived at in Sony India Pvt. Ltd. case.
4.4. This aspect was also noticed by another coordinate bench in a
judgement dated 19.04.2022, passed in CUSAA 36/2021, titled
Commissioner of Customs v S.R. Traders, which included one of us i.e.,
Rajiv Shakdher J. In S.R. Traders, it had been noted that the Bombay High
Court in CMS Info systems Ltd. vs Union of India 2017 (349) ELT 236
had taken a different view.
4.5. It is after noticing these aspects, that we had ruled in favour of the
assessee in the Premier Timber case. The relevant portions of the said
judgement are extracted below:
4. The relevant portion of the judgment passed in S.R.
Traders reads as follows:
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"2. Mr S Sunil, who appears on behalf of the
respondent, says that the issue is covered in favour
of the respondent/assessee, by virtue of the judgment
rendered by a co-ordinate bench of this Court in
Sony India Private Limited vs. Commissioner of
Customs, New Delhi 2014 (304) ELT 660 (Del), as
also the judgment dated 21.09.2016 rendered by
another co-ordinate bench in CUSAA 25/2016, titled
Commissioner of Customs (Import) vs. Wilhelm
Textiles India Private Limited.
3. We are told that, insofar as Sony India is
concerned, a Special Leave Petition (SLP) had been
filed, which was dismissed by the Supreme Court
vide order dated 26.02.2016 on the ground of delay,
keeping the questions of law open.
3.1. It is also the submission of the counsel for the
parties that a SLP was preferred in Wilhelm Textiles
India Pvt. Ltd. case as well. We are told that the
said SLP, which is, numbered as SLP(C)
No.1507/2017 has been admitted by the Supreme
Court, via order dated 15.04.2019.
3.2. Furthermore, we are informed by the counsel
for the parties that no stay has been granted by the
Supreme Court in the aforesaid SLP.
4. Mr Sunil, however, informs us that a division
bench of the Bombay High Court in the judgement
rendered in CMS Info systems Ltd. Vs. Union of
India, Ministry of Finance and Ors. 2017 (349)
ELT 236 has taken a contra view, qua the issue in
hand."
5. We may also add that the authorities below have sought to
distinguish the judgment rendered by this Court in Sony
India Pvt. Ltd. by furnishing the following reasons, in the
Order-in-Appeal dated 11.05.2020:
"5.4 Regarding the case laws cited by the Appellant,
I find that Pee Gee International case [2016 (343)
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ELT 72(Del.)] and Siya Paper Mart Pvt. Ltd. cases
refer to the Sony India decision. I find that the
period involved in the Sony India case was from
01.12.2007 to 05.12.2007. In the instant case, the
period involved is of 2016. It is to be noted that the
Notification No. 102/2007Cus dated 14.09.2007 was
amended by Notification No. 93/2008-Cus dated
01.08.2008 by which the condition of filing refund
claim within one year was inserted In the principal
Notification 102/2007. This has been amplified in
para 5.3.1 above. Thus the judgment of Sony India
and subsequent judgment based on it are not
applicable to present case.
5.4.1. In fact, this aspect has been specifically dealt
in the decision of the Hon'ble Bombay High Court in
the case of CMS Info Systems Ltd. [2017 (349) ELT
236 (Bom)] and the decision of Hon'ble Tribunal in
case of Honda Siel Power Products Ltd. [2019 (369)
ELT 1773 (Tri. Chennai)]. Appellants contention
that the order of jurisdictional High Court is binding
on the Department and the order of another High
Court cannot be relied upon is not relevant as the
facts and circumstances under which the order of
Sony India or Pee Gee International were delivered
were entirely different. The case of Sony India is for
the period prior to amendment of notification
102/2007-Cus. Thus this judgment cannot be applied
to present case."
6. In our view, the reasoning furnished by the Commissioner
of Customs (Appeals) via order dated 11.05.2020 is flawed,
as limitation cannot be prescribed by a notification.
6.1 This aspect of the matter was dealt by this Court in Sony
India Pvt. Ltd. case. The observations made in that behalf
are extracted hereafter:
"16. Section 27 (1) of the Customs
Act prescribes a time limit of expiry of "one
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year, from the date of payment of such duty or
interest...". Section 27 (1B) lists out three
contingencies when the one year limit applies
with modified effect. That provision has the
effect of shifting the date from which the refund
claim is to be reckoned. All that can be inferred
from the term "so far as may be" would be that
specific provisions relating to the mechanism
applicable for refund, in the Customs Act,
applied; not the period CUSAA 3/2014
[Sic:Page 11] of limitation. The Customs
authorities had never understood Section
27(1) as to mean that a one year period of
limitation was applicable. Audioplus (supra)
and United Chemicals Industries (supra) are
both testimony to this. It is the
circulars/notifications of 2008 and No. 16/2009
which for the first time harped on the one year
period of limitation. Circular No 6/2008 dated
28.4.2008 issued by the CBEC stated that:
"4. Time-Limit:
"4.1 In the Notification No. 102/2007-Customs,
dated 14-9-2007, no specific time - limit has
been prescribed for filing a refund application.
Under the circumstances, a doubt has been
expressed that whether the normal time-limit of
six months prescribed in Section 27 of the
Customs Act, would apply. In the absence of
specific provision of Section 27 being made
applicable in the said notification, the time-
limit prescribed in this section would not be
automatically applicable to refunds under the
notification. Further, it was also represented
that the goods imported may have to be
dispatched for sale to different parts of the
country and that the importer may find it
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difficult to dispose of the imported goods and
complete the requisite documentation within the
normal period of six months. Taking into
account various factors, it has been decided to
permit importers to file claims under the above
exemption upto a period of one year from the
date of payment of duty. Necessary change in
the notification is being made so as to
incorporate a specific provision prescribing
maximum time-limit of one year from the date
of CUSAA 3/2014 [Sic: Page 12] payment of
duty, within which the refund could be filed by
any person. It is also clarified that the
importers would be entitled to refund of duties
only in respect of quantities for which the
prescribed documents are made available and
the claims submitted within the maximum
prescribed time of one year. Unsold stocks
would not be eligible for refunds."
Notification No 93/2008 dated 01.8.2008 was
issued prescribing the period of limitation as
one year from the date of payment of
additional duty of Customs.
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 authorities started insisting that such
limitation period which was prescribed with
effect from 01.08.2008 (by notification)
became applicable. There is a body of law that
essential legislative policy aspects (period of
limitation being one such aspect) cannot be
formulated or prescribed by subordinate
legislation. Khemka and Co. (Agencies)
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Private Ltd. v. State of Maharashtra, (1975) 35
STC 571 and other decisions are authority on
the question that in matters which deal with
substantive rights, such as 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 CUSAA 3/2014
[ Sic: Page 13] imposition of a period of
limitation for the first time, without statutory
amendment, through a notification, therefore
could not prevail."
7. We respectfully agree with the view taken in Sony India
Pvt. Ltd. and therefore, allow the instant appeal.
8. Consequently, the impugned order dated 18.08.2021
passed by Customs, Excise and Service Tax Appellate
Tribunal is set aside as also the Order-in-Appeal dated
11.05.2020 and the Order-in-Original dated 11.02.2019.
9. The respondent will now process the application for
refund preferred by the petitioner, as per law, having regard
to the decision taken in the present appeal.
10. Needless to add, if the respondent/revenue were to
prefer an appeal and have it tagged with the Wilhelm
Textiles case (supra), the final view in the matter will abide
by the decision rendered by the Supreme Court in the said
appeal.
11. The appeal is disposed of in the aforesaid terms.
5. Thus, in line with the judgment rendered in Premier Timber, the
appeal preferred by the revenue is dismissed.
5.1. The order dated 24.11.2021 passed by the Tribunal is sustained.
6. The appellant/revenue will now process the application for refund
preferred by the respondent/assessee, as per law, in line with the decision
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rendered in the Premier Timber case.
7. It goes without saying that if the appellant/revenue were to prefer an
appeal and have it tagged with Wilhelm Textiles case, the final decision
rendered in the matter by the Supreme Court will bind the parties.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
AUGUST 18, 2022/pmc
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