Custom, Excise & Service Tax Tribunal
Honda Siel Cars India Ltd. vs Cc (Export Promotion) Mumbai on 24 October, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO.1
Miscellaneous Application No.C/MISC/86004/2018
(on behalf of Appellant)
in Customs Appeal No.681 of 2011
Order-in-Appeal No.153/MCH/DC/Refund(Exp.)/2011,
[Arising out of
dt.22.07.2011 , passed by the CC (Appeals), Mumbai Zone-I.]
M/s Honda Siel Cars India Ltd ......Appellant
Plot No.A-1, Sector 40/41, Surajpur-Kasna Road,
Greater Noida Industrial Development Area,
Dist: Gautam Budh Nagar (U.P.)
Pin: 201 306
VERSUS
CC (Export Promotion) Mumbai-I ......Respondent
New Customs House, Ballard Estate, Mumbai 400 001 Appearance:
For Appellant : Laxmi Menon, T. Viswanathan, Madhura Khandekar -
Advocates For Respondent : Shri R.K. Dwivedy, ADC (AR) CORAM:
HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) ORDER NO.A/86917/2019 Date of Hearing: 26.04.2019 Date of Decision: .10.2019 PER: DR.D.M. MISRA:
Heard both sides.
2. The Miscellaneous Application has been filed seeking change of cause title from "M/s Honda Siel Cars India Ltd." to "M/s Honda Cars India Ltd." pursuant to the fresh certificate of incorporation issued by the Registrar of Companies, Delhi & Haryana. Revenue has Honda Siel Cars - C MISC 86004 2018 C 681 2011 2 no objection. Consequently, the cause title is allowed to be changed and will read as: "M/s Honda Cars India Ltd.". MA allowed.
3. The appeal is filed against Order-in-Appeal No.153/MCH/DC/ Refund(Exp.)/2011, dt.22.07.2011 , passed by the CC (Appeals), Mumbai Zone-I.
4. Briefly sated the facts of the case are that the Appellants had imported cars (CBU i.e. Completely Built Units) and cleared the same on payment of duty by way of debiting the duty under DEPB scheme. At the time of import, they had paid 4% SAD through TR-6 challan dt.25.10.2007. Subsequently, on sale of the imported cars, they have filed refund of the said 4% SAD amount on 05.11.2008, in accordance with the Notification No.102/07-Cus, dt.14.09.2007. On adjudication, the refund claim was rejected by the Adjudicating authority, observing that the demand, inter alia, barred by limitation. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who in turn, rejected their appeal, hence, the present appeal.
5. The learned Advocate for the Appellant Shri T. Viswanathan submitted that they have imported 197 nos. CBU Cars against Bill of Entry No.801128, dt.25.10.2007. They have paid the applicable duty including 4% SAD leviable in terms of Section 3(5) of Customs Tariff Act, 1975. It is his contention that as on the date of importation of the said goods, in the relevant Bills of Entry Notification No.102/07- Cus, was applied to effect SAD payment. This notification allows exemption from SAD by way of refund of the same. At the time of import and making payment of SAD, the said Notification did not Honda Siel Cars - C MISC 86004 2018 C 681 2011 3 prescribe any time limit for filing of refund claim. It is his contention that the said notification No.102/07-Cus. was amended subsequently vide Notification No.93/2008-Cus, dt.01.08.2008. By virtue of the said amendment as per Condition (c), it introduced a time limit of one year for filing of refund of 4% SAD paid by the importer at the time of importation of the goods. In the present case, the date of payment of duty was 25.10.2007 and the refund claim to the tune of Rs.1,02,32,335/- was filed on 05.11.2008.
6. He has submitted that it is an established principle of law that the imports are subject to conditions of a notification existing as on the date of importation. In the present case, when the goods in question were imported, there was no time limit prescribed in the Notification No.102/07-Cus for claiming refund. Thus, amendment to the said notification, after importation cannot be applied. In support, they have placed reliance on the Judgment in the case of CC Bangalore Vs Spice Telecom - 2006 (203) ELT 538 (SC). Further, the Ld. Advocate referring to the judgment of Hon'ble Delhi High Court in the case of Sony India Pvt. Ltd VS CC - 2014 (304) ELT 660 (Del.), submitted that in the said case it has been held that the amending Notification No.93/08-Cus, cannot be made applicable retrospectively to the imports made earlier. He has submitted that SLP filed by the Department before Hon'ble Supreme Court against the said decision of Hon'ble Delhi High Court was dismissed on the ground of limitation. He has further submitted that the said judgment has been followed by the Tribunal subsequently in series of judgments. It is his contetnion that the time limit of one year cannot be made applicable to the imports made to un-amended Honda Siel Cars - C MISC 86004 2018 C 681 2011 4 Notification No. 102/2007 Cus. is also evident from the Circular No.6/2008 dt.28.04.2008 issued by the Board. It is his contention that imposition of a condition by way of a circular cannot whittle down the benefit of Notification in view of the principle of law laid down the Hon'ble Supreme Court in the case of Tata Teleservices Ltd Vs CC- 2006 (194) ELT 11 (SC). Further, he has submitted that the Notification No.102/07-Cus, issued under Section 25 of Customs Act, 1962, prescribed effective rate of duty. In terms of Section 15(1)(a) the condition to be applied to the imported goods is as had been prevailing at the time of importation. It is his contention that any amendment to such notification after import, cannot be applied prior to the amendment. Further, he has submitted that the judgment of Bombay High Court in the case of CMS Info Systems Pvt. Ltd Vs UoI
- 2017 (349) ELT 236 will not be applicable to the present case. He has submitted that in the said case, the Writ Petition was filed challenging the vires of the amending Notification No.93/08-Cus. In that context, the Hon'ble High Court held that the amendment was valid and disposed the Writ Petition accordingly.
7. Per contra, the learned A.R. for the Revenue has submitted that Hon'ble Bombay High Court in CMS Info Systems Pvt. Ltd.'s case, expressing an opinion different from that of Hon'ble Delhi High Court in the Sony India Pvt. Ltd's case, referring to Section 27 of Customs Act, 1962, observed that the period of one year prescribed under Section 27(1) of Customs Act, 1962 cannot be made applicable to all refund claims arising out of and under the Act. It is his contention that in case of conflicting view of different High Courts the judgment of jurisdictional High Court is binding on the Bench in Honda Siel Cars - C MISC 86004 2018 C 681 2011 5 view of the principle of law laid down by the Larger Bench of Tribunal in the case of J.K. Tyre & Industries Ltd Vs Astt. Commr, of C.E, Mysore - 2016 (340) ELT 193 (Tri-LB). It is his further contention that the said judgment was later followed by another Division Bench of Bombay High Court in the case of CC, NS-III Vs DSM Sinochem Pharmaceuticals (I) Pvt. Ltd - 2018 (359) ELT 509 (Bom.).
8. Heard both sides and perused the records.
9. The short issue involved in the present appeal for determination is: whether refund of 4% SAD paid at the time of import of CBU cars on 25.10.2007 is barred by limitation when the refund claim was filed on 05.11.2008 under Notification No.102/2007Cus. Dt.14.9.2007. It is not in dispute that prior to the amending Notification No.93/2008-Cus dt.01.08.2008, no time limit has been stipulated under the base of Notification No.102/07-Cus. dt.14.9.2007 for filing of refund claim of 4% SAD paid at the time of import. It is the contention of the Appellant that since at the time of import, there is no condition in the notification specifying time limit to file refund claim, accordingly, the period of one year introduced subsequently by Notification No.93/08-Cus, dt.01.08.2008 cannot be made applicable to the refund claim filed on 05.11.2008. The contention of the Revenue, on the other hand, is that the period of limitation for refund of Customs duty has been present under the statute at Sec. 27 of CA,1962 all along and also when the refund of 4% SAD paid at the time of import was filed on 05.11.2008, the amending Notification No.93/08-Cus, dt.01.08.2008 has been in Honda Siel Cars - C MISC 86004 2018 C 681 2011 6 force. The Revenue, strenuously relied upon the principle of law laid down by jurisdictional Bombay High Court in the case of CMS Info Systems Pvt Ltd's case (Supra).
10. The Hon'ble Bombay High Court, while dealing with the vires of amending Notification No.93/08-Cus, dt.01.08.2008, and differing with the observation of Hon'ble Delhi High Court in Sony India Pvt. Ltd case on the issue of applicability of period of limitation to the un-amended Notification No.102/07-Cus. dt.14.9.2007, observed as follows:-
"30. The very argument which was canvassed before us, namely, that the original exemption notification neither stipulated a time period within which the refund was to be claimed, nor it makes Section 27 of the Customs Act applicable to such claims. Secondly, since imports and payments of relevant customs duty were made when the original notification was in force and the amended notification had no retrospective effect, the appellant before the High Court of Delhi was entitled to refund of special additional customs duty.
31. It is in dealing with the first argument that the observations in Paras 10, 11, 12, 13 and 14 have been relied upon. Then in Para 17, the said High Court holds thus:-
"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 1-8- 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 imposition of a period of limitation for the first time, without statutory amendment, through a notification, therefore could not prevail."
32. On a perusal of these observations, it is apparent that the intent of the additional duties is to counter-balance the local taxes or other charges leviable on a like article. Then comes the aspect of exemption in relation to which the Hon'ble High Court observes that the intent is to allow a refund of the special additional customs duty because the importer has suffered the incidence of SADC on import. That was meant to counter-balance the sales tax/VAT leviable on a Honda Siel Cars - C MISC 86004 2018 C 681 2011 7 like article in India. These very articles have been sold and the importer then has to bear the burden even of the sales tax/VAT on sale of these goods.
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 an 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 an 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 Honda Siel Cars - C MISC 86004 2018 C 681 2011 8 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."
11. A simple reading of the aforesaid ratio makes it crystal clear that the period of limitation even if specifically not mentioned under the Notification No.102/07-Cus. dt.14.9.2007, before its amendment by the amending Notification No.93/08-Cus, dt.01.08.2008, all refund of customs duty being governed by Sec.27 of Customs Act, 1962, therefore, the time limit of one year from the date of payment of 4% SAD would be applicable. In the present case, since the refund claim filed by the Appellant on 05.11.2008 i.e. after one year from the payment of 4% SAD on 25.10.2007, is barred by limitation. We do not find merit in the contention of the learned Advocate for the Appellant that the principle of law laid down by Hon'ble Bombay High Court would not be applicable to the facts of the present case as the same was in the context of testing vires of the notification. The principle laid down by Hon'ble Bombay High Court and subsequently followed in DSM Sinochem Pharmaceuticals (I) Pvt. Ltd.'s case is squarely applicable to the facts of the present case and being the jurisdictional High Court, binding on the Tribunal situated in Mumbai, in view of the principle of law laid down by the Larger Bench of the Tribunal in the case of J.K. Tyre & Industries Ltd Vs Astt. Commr of C.E, Mysore - 2016 (340) ELT 193 (Tri-LB).
Honda Siel Cars - C MISC 86004 2018 C 681 2011 9 Since we have held that the refund is barred by limitation and hence not admissible, consequently other issues raised became academic and hence not considered.
12. In the result, the impugned order is upheld and the appeal is dismissed.
(Order pronounced in the open court on ........................... ) (Dr. D.M. Misra) Member (Judicial) (P. Anjani Kumar) Member (Technical) Bahalkar