Delhi High Court
Ms Premier Timber And Trading Pvt. ... vs Pr Commissioner Customs Import on 14 July, 2022
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decision delivered on: 14.07.2022
+ CUSAA 54/2021
PREMIER TIMBER AND TRADING PVT. LTD ......Appellant
Through: Mr Devinder Singh Nagi, Adv.
versus
PR COMMISSIONER CUSTOMS IMPORT ......Respondent
Through: Mr Vaibhav Joshi, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
1. The only issue, which arises in the present appeal, according to the
learned counsel for the parties, concerns application of limitation vis-à-vis
refund sought qua Special Additional Duty of Customs (SAD).
2. Mr Vaibhav Joshi, who appears on behalf of the respondent/revenue,
has fairly informed us that the issue stands covered by a judgement dated
16.04.2014 passed by a coordinate bench of this Court in Sony India Pvt.
Ltd v. Commissioner of Customs, New Delhi, 2014 (304) ELT 660 (Del), as
also by another judgment dated 21.09.2016, rendered by another coordinate
bench of this Court in CUSAA No.25/2016, titled Commissioner of
Customs (Import) v. Wilhelm Textiles India Pvt. Ltd.
3. We are informed, that these decisions were followed by another
coordinate bench [ comprising one of us i.e., Rajiv Shakdher J.,] in the
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matter of Commissioner of Customs v. S.R. Traders. This judgment was
passed in CUSAA No.36/2021 and is dated 19.04.2022.
4. The relevant portion of the judgment passed in S.R. Traders reads as
follows:
"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:
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"5.4 Regarding the case laws cited by the Appellant, I find that
Pee Gee International case [2016 (343) 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 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
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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 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 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 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."
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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) 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 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
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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.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
JULY 14, 2022/aj
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